Per Shri D. D. Vyas, Judicial Member - This is an appeal by the assessee ascertaining to the assessment year 1976-77. The assessee is an AOP. For the previous year relevant to the assessment year under consideration, it filed the return on 30-7-1976 declaring income of Rs. 59,024. It derives income from the same way as in the past. - (1.)
(2.) In the previous year relevant to the assessment year, assessee received membership fee to the tune or Rs. 9,102. Before the ITO, the assessee took the stand that it is a mutual association formed to guard and protect their interest. The sources of income are from membership subscriptions, donations and bank interest. It was submitted that the membership fee is not liable to tax on principle of mutuality. It was also pointed out that subscription fee is a charge on members, a condition precedent to becoming a member, and not income from its specific services performed. Thus, it was claimed that the subscription fee received from the members was not liable to tax. The ITO was not satisfied with the contentions of the assessee. According to him, similar point was in issue in the assessment year 1974-75 and in the year also such income was taxed. The ITO invoked the decision in the case of CIT v. Calcutta Stock Exchange Association Ltd. [1959] 36 ITR 222 [SC] and held that membership fee received by the association was taxable income. Accordingly a sum of Rs. 9,102 was included in the total income of the assessee. The ITO completed the assessment on 19-8-1978 on a total income of Rs. 74,910.
(3.) THE assessee took up the matter in appeal and again reiterated the same points which were canvassed before the ITO. THE learned AAC held that the assessee was not a mutual association and as such cannot claim exemption from tax on that ground. Thus, the learned AAC agreed with the finding of the ITO.;