Sikri, J. - (1.) These appeals by certificate granted by the High Court of Calcutta under S. 66A(2) of the Income Tax Act, 1922, are directed against the judgment of the said High Court answering two questions referred to it against the Revenue, The questions are:"(1) Whether the profit arising to the assessee company from miscellaneous insurance transactions of mutual character, was assessable under the Income Tax Act, and (2) If the answer to question No. (1) is in the affirmative, whether on the facts and in the circumstances of the case the balance of the profits as disclosed in the assessee company's profit and loss account after deducting the various reserves should be the taxable profits within the meaning of Section 2(6C) read with Rule 6 of the Schedule to the Indian Income Tax Act."
(2.) The relevant facts and circumstances are as follows:The respondent, the Calcutta Hospital and Nursing Home Benefits Association Limited, hereinafter referred to as the assessee, is a mutual insurance concern carrying on miscellanous insurance business. The principal objects for which the Association was established were: (1) By means of insurance on the mutual principle to provide, or help towards providing, anywhere in the world for the expense of accommodation and treatment in hospitals and nursing homes and of private nursing for members and their dependents. (2) To organise insurance on the mutual principle under Rules and Regulation; to be framed for the purpose with the object of providing such hospital, medical, surgical, nursing and allied services as before mentioned, of supporting and assisting hospitals, in Calcutta or elsewhere; of relieving members or their dependants, in whole or in part from the payment of hospital and other charges while in receipt of such hospital, medical, surgical, nursing and allied services; and of reimbursing and repaying to members or their dependants in whole or in part, all payments for such hospital and other charges which they may have incurred or made while in receipt of such hospital, medical, surgical, nursing and allied services.
(3.) The members were required to pay a monthly premium, but there was a waiting period of four months for all benefits other than maternity, for which the waiting period was one year. Benefits and privileges became available as from the first day of the fifth calendar month of registration (in respect of Maternity the 13th month) and continued to be available thereafter so long as the subscriptions were not in arrear.;