ORDER
1. The Income Tax Appellate Tribunal, Delhi referred the following question of law under section 27(1) of the Wealth Tax Act, 1957, hereinafter referred to as 'the Act', for opinion to this Court:
In favour of assessee.
"Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that an Association of persons cannot be assessed to wealth-tax under the Wealth Tax Act and thereby upholding the annulment of wealth-tax assessments on the assessee by the ACC ?"
2. The reference relates to the assessment years 1974-75 to 1976-77.
2. The reference relates to the assessment years 1974-75 to 1976-77.
3. Briefly stated that facts giving rise to the present Reference are as follows
3. Briefly stated that facts giving rise to the present Reference are as follows The respondent is an association of persons. It is a Club and has been assessed in the status of an association of persons. On appeal, the Appellate Assistant Commissioner annulled the assessments holding that under the Wealth Tax Act an association of persons cannot be assessed to Wealth-tax which order has been upheld by the Tribunal.
4. We have heard Sri A.K Mahajan, leamed Standing counsel for the revenue and have perused the record.
4. We have heard Sri A.K Mahajan, leamed Standing counsel for the revenue and have perused the record.
5. It may be mentioned here that under the Wealth Tax Act there was no provision for assessing an association of persons. After insertion of section 21AA of the Act by the Finance Act, 1981 with effect from 1-41985 the association of persons has also been made taxable under the Wealth tax Act. The Apex Court in the case of CWT v. Ellis Bridge Gymkhana (1998) 229 ITR has held that section 21AA of the Act was not in force during the assessment years prior to 1-4-1981, and there was no way that a club could be assessed as an association of persons in these assessment years.
5. It may be mentioned here that under the Wealth Tax Act there was no provision for assessing an association of persons. After insertion of section 21AA of the Act by the Finance Act, 1981 with effect from 1-41985 the association of persons has also been made taxable under the Wealth tax Act. The Apex Court in the case of CWT v. Ellis Bridge Gymkhana (1998) 229 ITR has held that section 21AA of the Act was not in force during the assessment years prior to 1-4-1981, and there was no way that a club could be assessed as an association of persons in these assessment years.
6. Respectfully following the aforesaid decision of the Apex Court, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.
6. Respectfully following the aforesaid decision of the Apex Court, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.