TaxTMI 
TaxTMI 
1957 (7) TMI 45
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....sequent notification No. 26, dated the 25th June, 1927, No. 35, dated the 20th October, 1934, and No. 33, dated the 18th August, 1945, the profits of the co-operative bank were exempt from being taxed. The relevant portion of the notification is to the following effect: "The following classes of income shall be exempt from the tax payable under the said Act, but shall be taken into account in determining the total income of an assessee for the purpose of the said Act:-......... (2) The profits of any co-operative society other than the Sanikatta Salt-owners' Society in the Bombay Presidency for the time being registered under the Co-operative Societies Act, 1912 (Act II of 1912), the Bombay Co-operative Societies Act, ....
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....wing questions of law for the opinion of the High Court under section 66(1) of the Indian Income-tax Act: "1.Whether, in the facts and circumstances of this case, the receipt of interest on fixed deposits was an income under the head of 'other sources'? and 2.Whether, in the facts and circumstances of this case the receipt of interest from the fixed deposits was an income not exempt from taxation under the C.B.R. Notification No. 35, dated the 20th October, 1934, and No. 33, dated the 18th August, 1945?" On behalf of the assessee Mr. Mazumdar put forward the argument that the fixed deposits were made with the Imperial Bank, not with the motive of investment but for the reason that liquid money should be availabl....
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....er 1 do. 50,000 11,50,000Dr. October 22 do. 1,00,000 12,50,000Dr. October 29 do. 1,00,000 13,50,000Dr. December 31 by balance ................. 13,50,000 13,50,000Dr. 13,50,000 13,50,000 I am unable to accept this submission of learned counsel as correct. The object of the assessee bank was to lend money to its constituents and to sell agricultural and other products on behalf of its constituents (see the order of the Appellate Assistant Commissioner at page 6 of the paperbook). It is no part of the business of the co-operative bank to invest the fluid assets. If income is derived by a co-operative society from the business of t....
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....r of Income-tax [1933] 1 ITR 158 . The same view has been expressed by the Rangoon High Court in Commissioner of Income-tax, Burma v. Bengalee Urban Co-operative Credit Society Ltd [1934] 2 ITR 121 . There is a similar statement of principle in Carlisle and Silloth Golf Club v. Smith ( Surveyor of Taxes) [1913] 6 Tax Cas. 198, where a golf club, unincorporated, and admittedly a bona fide members' club, was bound under a clause in its lease to admit non-members to play on its course on payment of green fees to be fixed by the lessors but not to be below a minimum named in the lease. It appears that these green fees were paid by the non-members and entered in the general account of the club which showed an annual excess of receipts over e....
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....the determination of this case, it is only necessary to say that the club as an association (like the proprietary owner of a golf links) is receiving payments from third parties, and that the balance of profits or gains after debiting against those receipts such sum as may be proper by way of expenditure is a profit going into the pocket of the club in respect of which it is assessable." A similar view has been expressed in a later case, Commissioners of Inland Revenue v. Sparkford Vale Co-operative Society Ltd. [1925] 12 Tax Cas. 891, where a co-operative society registered under the Act, dealing in milk, purchased milk exclusively from its own members but sold the same or the products thereof in the open market. It was held in these ci....