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Section 21AA of the Wealth-tax Act, 1957 - Association of persons - Assessment when assets are held by certain AOP - Assessment year 1981-82 - Whether individual member of a club registered under Societies Registration Act, 1860 can be said to hold a share in the income/assets of club - Held, no FACTS The assessee-club was an AOP within the meaning of section 21AA and was registered under the Societies Registration Act. The question was whether it could be said that in the case of a club registered under the Societies Registration Act, the members could be said to be holding shares either in the income or in the assets, or in both, of the club. HELD The Board's Circular No. 320, dated 11-1-1982, issued under section 167A of the Income-tax Act, 1961, clarifies that members of such clubs do not have any share in the income or assets of such association. Since there is no definition of the AOP under the 1957 Act, the said expression must be understood in the same sense in which it is used in the 1961 Act. If so, the principle of the Board's circular will apply with equal force in the case of an AOP under the 1957 Act. Thus, no individual member holds a share in the case of such a club. According to section 14 of the Societies Registration Act, on the dissolution of a society registered under the said Act, if any assets remained after satisfying all its debts and liabilities, the same shall not be paid to or distributed among the members of the society or any of them, but should be given to some other society. In view of this matter, it is very difficult to say that a member of a club has a share either in the assets or income of the club. CASE REFERRED TO Deccan Wine & General Stores v. CIT [1977] 106 ITR 111 (AP). M.S.N. Murthy for the Respondent. JUDGMENT Reddy, J. - The only question which the revenue wants us to direct the Tribunal to refer under section 256(2) of the Income-tax Act, 1961 ('the 1961 Act') is : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the assessee is not liable to wealth-tax after the introduction of section 21AA in the Wealth-tax Act, 1957?" The assessment year is…

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