- (1.) THIS judgment will dispose of Income-tax References Nos. 47 of 1978, 18, 19 and 50 of 1979, which involve similar questions though the assessment years are different. For the purposes of this judgment, the facts from the statement of case in Income-tax Reference No. 47 of 1978 have been noticed.
(2.) THE question referred to us by the Tribunal is : "whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the provisions of Section 28 (iii) are not applicable in this case and that the income of the assessee is not taxable ? "
(3.) THE facts found by the AAC, Jullundur, and which were not controverted by the Tribunal are that 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. As and when any load was received by the union, it 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 20 per cent. was allowed to the customers and out of this rebate 15 per cent. was passed over to the actual consumer and 5 per cent. was retained by the union. On these facts, it was urged that there was no activity in the nature of trade which could result in profits and that a sum of Rs. 37,450 which was found as surplus was actually refunded to the members in the accounting period relevant to the assessment year. The plea was negatived by the ITO. On appeal, the AAC upheld that order with the following observation : "further I am of the opinion that in this case, there are no voluntary contributions by the members and all the contributions are a recompense for the services rendered by the union. . . . It was the duty of the union to contact customers and the commission agents or in the alternative these parses to contact the union for seeking its assistance to procure trucks for transporting their goods. . . . To my mind, it will not make any difference whether the commission has been paid by the truck owners or by the customers whose load had been transported. But it is evident that this receipt could directly co-relate with the services rendered by the union. . . . ";