The club has an entry fee of Rs 40, and Rs 2,000 is charged for taking cellphones inside.

A division bench of Justices Sanjiv Khanna and R V Easwar on Wednesday said if a fee is charged for allowing phones inside, the total payment for entry is liable to tax.

The court order came on the club’s appeal to quash a Delhi government tax assessment, where the club was asked to pay Rs 1.28 crore as entertainment, luxury and betting taxes. The Tax department’s assessment had included the phone entry fee under its ambit.

The club had then moved court.

The division bench, however, found favour with the government’s argument. It also upheld the contention of government standing counsel Najmi Waziri that since the club was charging extra to allow phones inside, the sum was taxable.

The bench turned down the club’s contention that the Rs 2,000 fee was a “regulatory” measure to check indiscriminate use of cellphones inside the club.