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1955 (2) TMI 16 - TRAVANCORE-COCHIN HIGH COURT

1955 (2) TMI 16 - TRAVANCORE-COCHIN HIGH COURT - [1955] 27 ITR 535 - Income-Tax Reference No. 9 of 1954 - Dated:- 22-2-1955 - P. K. Subramania Iyer And M. S. Menon, JJ. For the Commissioner : G. Rama Iyer For the Assessee : N. Varadaraja Iyengar and K. Parthasarathi Iyengar JUDGMENT M. S. Menon, J. This is a reference by the Income-tax Appellate Tribunal, Madras 'B' Bench, on the application of the Commissioner of Income-tax, Mysore, Travancore-Cochin and Coorg, Bangalore, the question r .....

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services, and the profits and gains therefrom shall be liable to tax accordingly," and the contention of the Alleppey Chamber of Commerce which found favour with the Income-tax Appellate Tribunal, Madras 'B' Bench, was that the two amounts in question do not form remuneration definitely related to specific services performed and so cannot be taxed under the provisions of sub-section (6) of section 10 as was done in the assessment order dated 15th September, 1952, for the years 1950 .....

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s rendered by the exchange in return for the collections made, except maintaining the status of an association and presenting a united front in its dealings with the outside world. No specific services appear to have been rendered by the produce exchange to its members. The only specific service rendered is in respect of arbitration for which a separate fee is charged. The learned advocate admitted that the receipts under the head are chargeable to income-tax. The general collection of so many p .....

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cer should therefore delete from the assessments the general collections included in the assessments, already referred to above. 2. The appeals are allowed." 3. It is admitted that only members of the Alleppey Chamber of Commerce can be members of the produce section and there is no dispute on the ground that the services performed are not "services for its members". The only questions, therefore, that arise for consideration are: (1) Can the contribution of six pies per candy on .....

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ary, 1954. Rules 3 and 5 of the rules in annexure A are the relevant rules for answering question No. (1). They as well as rules 4, 6 and 7 come under the general heading "Membership Fees" and read as follows: "3. An Admission fee of ₹ 25 and a monthly fee of ₹ 5 shall be paid along with an advance of three months' fees before enrolment. 4. Subsequent monthly fees of ₹ 5 per mensem shall be paid by every member within a week of the receipt of the monthly bill .....

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utions due from any member who has a coupon deposit may be deducted from that deposit amount at the time of refund or withdrawal as the case may be." On a reading of rules 3 to 7 we entertain no doubts that the admission fee of ₹ 25, the monthly fee of ₹ 5 and the contribution under rule 5 all form part of the levy for the services rendered to the members of the produce section and should be considered as "remuneration definitely related to those services." The content .....

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n produce trade in particular, to define the customs and usages of such trade, and to make rules and regulations conducive to just and honourable practices therein, and to consider all questions affecting the interests of produce trade. (b) to adjust controversies, to arbitrate upon and settle disputes of all kinds, to appoint arbitrators, umpires and experts, to make awards and decisions and generally to encourage and stimulate fair and honourable trading; (c) to collect, print, publish and cir .....

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ch they are entitled by the subscription that they pay for the Chamber membership; and (2) those additional services to which they are entitled by becoming members of the produce section and paying the additional subscription, namely, the fees and contribution specified in rules 3 and 4 of the rules of the produce section. 6. What we are called upon to decide is whether the latter can be styled as "specific services" within the meaning of section 10(6) of the Indian Income-tax Act, 192 .....

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inauguration and continuance of the produce section is itself a specific service on the part of the Chamber and the provisions of rules for the conduct of trade, the settlement of disputes and the dissemination of correct and up-to-date information cannot also be considered as anything other than specific. That extra fees may have to be paid for some of the services will not make the services fully covered by the fees and contributions under rules 3 and 4 any the less specific and the argument .....

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