TMI Blog1957 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... agas could be charged are set our. It will be noticed that the lagas are only payable by members when they are doing business on behalf of a non-member. No laga is payable by a member when he does business on his own behalf. It will also further be noticed that lagas are not charged in respect of various commodities which come within the ambit of this Chamber of Commerce. They are restricted to only four commodities mentioned in the bye-laws. The first question that has to be considered is whether tax is payable under section 10(6), and in order to attract tax under that sub- section it is necessary that we must have an association performing specific services for it members for remuneration definitely related to those services. The spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer could be suspended and notwithstanding the suspension of this facility the laga would still be payable. Therefore, it would be erroneous, in our opinion, to say that the Chamber was performing specific services for its members for remuneration definitely related to those services. The remuneration charged had no relation whatever to the services rendered, and it is also difficult to say that the services relied upon were specific services rendered in return for the remuneration charged by the Chamber. Therefore, in our opinion, the case clearly does not fall under section 10(6). The next question is whether the lagas are liable to tax under section 10(1) as business income, and the answer given to it by the assessee, and which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the income-tax law. It was contended by the Department that there is no participation by the members in this fund at all because the fund is earmarked for specific purposes mentioned in bye-law 281. Mr. Palkhivala's contention was that there is a provision in article 100 of the articles of association that in the case of the winding up of the Chamber, the assets including the profits are divisible amongst the members, and according to Mr. Palkhivala this fund is subject to this article and would be divisible amongst the members on the winding up. The mere fact that the association chooses to provide for the application of the fund in a particular manner will not in any way militate against the fact that all the members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered trade union and it ran a holiday camp to provide cheap holiday facilities for its members, their wives, families and friends. The profits made by running this camp were credited to the general funds of the association and the funds endured for the benefit for the members of the association as a whole and not of the camp users only, and what was urged with regard to that case was that although profits from the camp were made by contribution made by only some of the members and the profits were spent on all the members and although there was no identity between the contributors and the participators, still the English Court held that it was a mutual association, and in dealing with that argument we pointed our that although only a few m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsisting right to be members of this fund or to be contributors to this fund. With regard to some there was a subsisting right, with regard to others the right would only arise provided a particular condition was satisfied. Let us look at it from another point of view. It is true that the facilities afforded by this Chamber with regard to maintaining a ring, making arrangements for delivery orders, etc., were open to all the members, but as far as the payment for these facilities was concerned, it was only restricted to a section of the members. The other members, although they availed themselves of the facilities, had no obligation to contribute to this fund. Therefore, whichever way one looks at it, it is clear that the first essential o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
