TaxTMI 
TaxTMI 
1937 (10) TMI 13
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....f the Company the question was referred by the Commissioner of Income tax to this Court which decide that the Income tax authorities had taken the correct view. (The Trichinopoly Tennore Hindu Permanent Fund Ltd. v. The Commissioner of Income Tax, Madras, 2 Income tax Cases 386). After this decision had been given the company took steps to alter its memorandum and articles of association, in the original memorandum the objects of the company were stated to be :- "(a) to enable persons to save money : (b) to enable persons to secure loans at favorable rates of interest on sufficient securities; and (c) to do all such either things as are incidental or conductive to the attainment of the above objects". For the word "persons" the word "member....
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.... shares of Re. 1 each of fully paid amounting to... 6,000 9,90,000 A person who required a loan had under the altered articles to become a member, but he could become a member on payment : of one rupee, which he was entitled to withdraw at the end of two years. In passing I should mention that it is conceded that the ordinary shares have been issued to persons who under the former scheme would have been non-member borrowers. After the memorandum and the articles had been altered, the company contended that it was in fact a mutual benefit society, and therefore, its income was not taxable. The contention was accepted for the years 1928-29, 1929-30 but 1930-31, but in respect of the 1931-32 assessment the income t....
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....ince the year 1927 ? (v) Whether the assessment of the petitioner of the year 1930-31 under Sec. 34 of the Act is valid and maintainable ? It will be convenient to take questions (i) and (ii) together. The case referred to in 47 Madras I is that of the Board of Revenue v. The Mylapore Hindu Permanent Fund Ltd. There the capital of the society was made up solely of periodical investments by its members and the income of the society was mainly derived from interest on loans given to its members, every one of whom was by the rules eligible to take loans. It was held that such Income Tax Act, 1918. The Trichinopoly Tennore Hindu Permanent Fund Ltd., however, differs in material respects from the Mylapore Hindu Permanent Fund Ltd. Th....
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....possible for the company to contend that it is a mutual benefit society and its income is not taxable. A very similar question to the one which arises was dealt with in the case of The Leeds Permanent Benefit Building Society v. Mallandaine (1897, 2 Q.B. page 402). This Society consisted of members who held one or more shares or one or more fifty parts of a shares and the shares were divided into two classes : (1) investors shares and (ii) borrowers shares. The members were divided into classes according to the shares they held. The society AIDI lent money to its members at a fixed rate of interest. The payment of the loans was by weekly payments of a fixed sum, which covered both principal and interest. No deduction was allowed by the I....