Law: Income Tax Act, 1922

Section: 10(6)

Law: Income Tax Act, 1961

Section: 28(iii)

Section 28(iii) of the Income-tax Act, 1961 [Corresponding to section 10(6) of the Indian Income-Tax Act, 1922] - Business income - Trade/ Professional Association - Assessment year 1945-46 - Respondent assessee-company was incorporated with object of taking over assets and liabilities of an association called "Calcutta Stock Exchange" - Company was composed of "members" who had to pay entrance fee - Bylaws of assessee-company also provided that members were permitted to have authorized assistants on payment of certain subscription to assessee - Further, assessee-company was entitled to receive from its members amount representing fees for allowing their application for enlisting names of companies not already on quotations list so that shares and stocks of said companies might be placed on stock market - During relevant assessment year, assessee-company received certain amount from its members on aforesaid heads - Whether amount so received by assessee-company was chargeable to tax under provisions of section 10(6) of 1922 Act - Held, yes FACTS The respondent-company (i.e. assessee) was incorporated with a view to taking over the assets and liabilities of an unincorporated association of Calcutta Stock Exchange and to carrying on the affairs of the stock exchange which had been founded by that association. The principal object of the respondent-company was to facilitate the transaction of business on the stock exchange. The company was composed of "members" who might be either individuals or firms, who, except in the case of parties who had been members of the unincorporated association had to be elected as such, and upon such elections had to acquire a share of the company and pay an entrance fee. The members had to pay a monthly subscription according to the by laws of the company. Under the by-laws of the respondent company, members with a certain standing, were allowed to have authorized assistants up to a maximum of six in number, such authorized assistants were permitted the use of the premises of the association and to transact business therein in the names and on behalf of the members employing them. The members had to pay an admission fee for such…

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