Law:

Section:

Section 28(iii ) of the income-tax act, 1961-Trade association-Income derived from rendering services to its members-Assessee, an association of trucks owners charged prescribed fee for registration of its members and allocating them load received from customers-Assessee also retained part discount allowed to its customers-ITO taxed surplus amount Under section 28( iii)-Tribunal deleted same holding that assessee's activities did not constitute trading activities and that its income was not taxable-Whether tribunal right in law-Held, on facts, no Facts All the truck owners of Hoshiarpur district, who had permits to ply their trucks on the hill routes, formed a union in order to cut down the competition amongst themselves and set up a device to regularise the working of the trucks for the maximum benefit of its members. Any truck owner could get himself registered with the union on payment of Rs. 4. The load received by the union was allocated to its members turn by turn on payment of Re. 1 at the time of each loading. There was also a special provision for carrying of bricks. A special rebate of 30 per cent was allowed to the customers and, out of this, rebate of 15 per cent was passed over to the actual consumer and 5 per cent was retained by the union. During the assessment year 1973-74, there was a surplus of Rs. 37,450 which was claimed by the assessee as non-taxable on the grounds that (i) it did not represent any profit and there was no activity in the nature of trade; and (ii) the same was actually refunded to the members in the relevant assessment year. The ITO and the AAC negatived the assessee's plea. The AAC held (i) that the members did not make any voluntary contributions which were only a recompense for the services rendered by the union; and (ii ) that it would not make any difference whether the commission had been paid by the truck owners or by the customers whose load has been transported and the receipt could directly correlate with the union's services. On further appeal, the Tribunal, however, held that such an activity did not constitute a trading activity and the resultant surplus was not chargeable to income-tax. Observing that the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492