CHELMSFORD CLUB vs COMMISSIONER OF INCOME TAX, DELHI

The Supreme Court addressed two questions referred by the Income Tax Appellate Tribunal regarding the applicability of income tax on the annual letting value of a club building under Section 22 of the Income Tax Act, 1961. The Court held that the principle of mutuality does not exempt the club's income from taxation, as the business does not demonstrate the necessary identity between contributors and participants. The Court affirmed the High Court's decision, ruling that the income is assessable under the Act, thereby upholding the tax liability of the appellant.