COMMISSIONER OF INCOME TAX WEST BENGAL Vs. CALCUTTA STOCK EXCHANGE ASSOCIATION LIMITED

JUDGEMENT

(1.) THE following Judgment of the court was delivered by

(2.) THE question for determination in this appeal on a certificate of fitness granted by the High court of Calcutta, is whether the respondent's admitted income tinder certain heads, is chargeable to income-tax under the provisions of s. 10(6) of the Indian Income-tax Act, 1922 (XI of 1922) (hereinafter referred to as the Act). THE Calcutta High court, by its judgment dated 6/01/1956, answered the question in the negative, disagreeing with the determination of the Income-tax Appellate tribunal by its order dated 23/04/1949.

(3.) FIRSTLY, the sum of Rs. 60,750.00 has been realised from such members as applied for and obtained permission of the Association to have the use of Authorized Assistants within the precincts of the Stock Exchange. There cannot be the least doubt that unless those members paid the prescribed entrance fees for one or more Authorized Assistants upto a maximum of six, they could not have the benefit thus conferred upon such members. Ordinarily, a member has to transact business in the precincts of the Association by himself or by his business partner if there is a firm ; but if that member is a very busy person, and wishes to avail of the services of Authorized Assistants, he has to pay the the prescribed fee. A member of the Association, with the advantage of mutuality, so long as he transacts business within the precincts of the Association, by himself or by his partner in the case of a firm, is not required to pay any such entrance fee but only the fee payable by every member as such. The entrance fee, thus, is clearly chargeable only from such of the members as avail themselves of the benefit conferred by the rules of the Association in that behalf. The entrance fee is, thus, a price paid for the services of the Association in making suitable arrangements for an absentee member to transact business on his behalf and in his name by his representative or agent. The entrance fee in question, therefore, cannot but be ascribed to the specific services rendered by the Association in respect of Authorized Assistants who thus become competent to transact business on behalf of their principal.