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TMI Blog1921 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Excess Profits Duty Rule?, 1919, for a case to be stated on the question whether the Club is liable to excess-profits duty. It appears from the Collector's record that the Club was assessed to income tax for the fir it time in 1918 and the Club's liability to income tax is not disputed, but it is contended that its income does not include any profits of a business, within the meaning of the Excess Profits Duty Act. The grounds for this contention are set forth in a statement of case annexed to the Club's application, which also sets forth the sources of the Club's income. In the Board's opinion, the Club is liable to excess-profits duly in respect of the following sources of income, in so far as the sums received under these heads are not paid by members of the Club. Entrance fees to the stand, paddocka and enclosures, or gate money. Entrance fees paid by owners of hones. Book-makers' license fees. Percentages on the totalisators. Percentages on sweeps on the Derby and St. Leger. 3. The case appears to the Board to be parallel to that of the Carlisle and Silloth Golf Club v. Smith (1912) 2 K. B. 177 : 81 L. J. K. B. 581 : 106 L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. It is to be noted that the Board stated that if it were decided that the Royal Calcutta Turf Club were liable to excess profits duty there would still be the question whether the receipts from the sources which I have mentioned, yielded a profit after donating expenses properly chargeable against them in the accounting period, on which excess-profits duty was leviable, and that that would be a question of fact for determination by the Collector. Therefore, the only question, which this Court has now to determine is whether, on the facts of this case, the Royal Calcutta Turf Club is liable to excess profits duty, if there be any excess profits in respect of the four heads. Whether any profits will be assessable to that duty will still remain a question which will have to be investigated by the Collector. 7. The objects of the Club are set forth at length in the case which the Turf Club submitted and the material portions may be stated as follows. 8. The present large operations of the Club are the result of a gradual development. The proprietors of the Club are the present members, none of whom derive or ever have derived any pecuniary profit from the operations of the Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of racing generally. During the war the policy was to save as much as possible, and give the amount to charities. Certainly, since the year 1860 no member of the Club has ever received any Pecuniary benefit. No profits have ever been divided.' It was then submitted as follows it is impossible to say that a Club which has never (ought to make a profit and of which the members have not derived and do not seek to derive any pecuniary benefit, carries on a business as described in the Act or at all. It is clear that its operations are not trade, commerce or manufacture, nor have they the remotest resemblance to any of these descriptions. It is understood that it has been proposed that it should be decided whether the Club carries on a business before undertaking the somewhat complicated problems of accountancy to ascertain what are the profits, if any, liable to excess-profits duty and accordingly this statement of the case is submitted for consideration with a view to show that the Club is not liable to excess profits duty. 12. The question depends upon Section 3 of he Excess Profits Duty Act which is as follows: This Act, shall apply to every business (other than the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based upon an English case Carlisle and Silloth Golf Club v. Smith (1) which in the first instance was decided by Mr. Justice Hamilton and afterwards by the Court of Appeal, which upheld the judgment of Mr. Justice Hamilton [Carlisle and Silloth Golf Club v. Smith (1913) 3 K. B. 75 : 80 L. J. K. B. 837 : 108 L.T. 785 : 11 L. G. R. 710 : 6 Tax. Cas. 198 : 57 S. J. 532 : 29 T. L. R. 508.]. It is true that that is a decision upon the question whether the Golf Club was liable to pay income tax, but the decision was to a large extent based upon the consideration of the question whether the Golf Club was carrying on business within the meaning of the Income Tax Act, 1842 (5 6 Vict. Section 35), Schedule D of which specified The duties to be charged in respect of any trade, manufacture, adventure or concern in the nature of trade not contained in any other Schedule of the Act. These words, it will be seen, bear a close resemblance to the words which we have to construe. The facts may be taken from the head-note: The appellants, an 'ordinary members' Golf Club,' acquired land under a lease from a railway company and laid out a golf court and erected a Club house thereon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for income tax. Id my judgment on the facts of this case, the Royal Calcutta Turf Club is carrying on the business of supplying to the public for reward a ground fitted for the purpose of racing---some portion of the public use it for the purpose of racing their horses, namely, the owners of race horses; other members of the public use it for the purpose of carrying on their business, namely, the bookmakers who resort thereto under licenses which are issued to them for reward by the Royal Calcutta Turf Club; other members of the public use it for watching the roads and for the purpose of betting on the races. All these, according to the case presented to up, pay money to the Club either in respect of entrance fees at the gates or in respect of fees for the entries of horses in the races or in res-peat of licenses issued to book makers or in respect of the commission which is taken by the Club from the totalisators. In my judgment, upon the facts stated in the case submitted to the Court, it must be held that the Royal Calcutta Turf Club is carrying on an adventure or concern in the nature of trade and consequently is carrying on a business within the meaning of Section 3 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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