Law:

Section:

Section 28(i) , read with section 28(iii) of the Income-tax Act, 1961 [Corresponding to section 10(1), read with section 10(6) of the Indian Income-tax Act, 1922] - Business income - Chargeable as - Assessee-company carried on business of race course, hotel-keepers, tavern keepers and refreshment purveyors etc., - Assessee had two categories of members and both had to pay assessee entrance fee and annual subscription fee - In course of assessment, assessee claimed that in computing its total income, following four items of receipt should be excluded i.e. (1) season admission tickets from members (2) daily admission gate tickets from members (3) use of private boxes by members (4) income from entries and forfeits received from members whose horses did not run in races during season - There was no mutual dealing between members inter se and no putting up of common fund for discharging common obligations to each other undertaken by contributors for their mutual benefit - Character of charges made on members was precisely same as or was similar to that of charges made on non-members, for company receive moneys from both members and non-members in return for same or similar facilities given to both in course of one and same business - Dealings in both cases disclosed same profit-earning motive and were alike tainted with commerciality - Whether on facts, aforesaid items of receipts from members were receipts by assessee from business with its members within meaning of section 10(1) of 1922 Act and none of them was receipt by assessee as trade, or professional or similar association within meaning of section 10(6) of 1922 Act - Held, yes FACTS The assessee-company was incorporated, inter alia, to carry on the business of a race course, hotel keepers, tavern - keepers, licenced victuallers and refereshment purveyors etc. Under the company's Articles of Association that were in force during the accounting year, besides honorary stand members, visiting members and temporary members there were two main categories of members, namely, the club members and stand members. The members had to pay an entrance fee and an annual subscription fee. The assessee had two race…

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