TaxTMI 
TaxTMI 
2012 (5) TMI 123
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....and are not much in dispute. The appellant herein is publishing monthly magazine known as Akhand Jyoti. He received annual subscription as well as subscription for lifetime for the aforesaid magazine from its readers. During the assessment year 1991-1992 the Assessing Officer found that a sum of Rs.2,72,000/- was received as life membership by the assessee towards the subscription of the said magazine and the said amount according to the Assessing Officer was revenue receipt. He added the said amount in the income of the assessee. The case of the assessee was that the said amount of Rs.2,72,000/- was received by way of life membership on the agreement between the parties that the amount is refundable to the subscriber as and when any sub....
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....e respective submissions of the learned counsel for the parties and perused the record. The Assessing Officer has noticed that in the earlier years, the assessee received the annual subscription as well as lump-sum subscription for ten years. One tenth of the subscription for ten years was treated by the assessee as revenue receipt. It has been further found that the assessee is maintaining only one account with regard to its receipts and expenses incurred in printing, publishing and distribution of the said magazine. The assessee is not maintaining any separate account of expenditure of printing, publishing and distributing the magazine to its life members. It has been further noticed that the assessee could not produce any evidence to sho....
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....nterest accrued on paltry sum of Rs.150/- was sufficient to meet the expenses attributable to paper used, ink used, expenditure of proofreading, royalty payment, printing expenditure, distribution expenses etc., which has been debited to to profit and loss account against the other receipts. The Tribunal has further noticed that the ten years subscription and annual subscription are considered as revenue receipt and there is no justification to give any other treatment to the subscription given by the life members. The question whether a receipt is or is not a trading receipt has to be judged with reference to the circumstance present at the moment the receipt was received. If at the moment it was a trading receipt it cannot be turned ou....
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....ceived from life members as subscription is refundable. As noticed by the Assessing Officer, no such agreement could be produced by the assessee. The decision relied upon by the learned senior counsel for the assessee given in the CIT Vs. Mantra Tantra Yantra Vigyan (supra) has hardly any application to the facts of the present case. There the assessee was also publishing a monthly journal on Astrology and was having huge numbers of subscribers. Rs.1500/- was received according to the Revenue by way of subscription for life members, which sum was shown in the balance sheet as liability. The Assessing Officer found that only a sum of Rs.3,000/- had been refunded while a huge sum remained with the assessee. It was held that the receipt of ....
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....would show that it was a case where the assessee was a society and always treating the deposits as money belonging to the members, cane grovers. The assessee merely acted as an agent in collecting the amount towards the Chief Ministers Relief Fund and other such funds and remitting the same to the government. The answer was given by the Apex Court in the light of the bye laws of the society. The Court observed that the question has to be examined from various angles running in a common direction. For instance, it becomes. necessary to enquire : Do the receipts bear the character of income at the time the reach the hands of the assessee? Does the title to the money get vested with the assessee-society once and for all, the assessee exercisin....
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....in the peculiar facts of that case and it has no application to the facts as they exist in the case on hand. In brief, the question there was whether compulsory collection is trading receipt or not. It was found that the receipts were not for the benefit of the company, being compulsory deductions for ascertained liability to members or depositors. They continued as a liability of assessee company retained for their benefit and refundable to them in the case of death or resignation. All these features make the ratio of S. Sahkari Sakhar Karkhana Ltd. (supra) distinguishable to the facts of the case on hand and is of little help to the controversy before us. We are of the considered view that the ratio laid down by the Apex Court in the S....