1981 (3) TMI 27

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....m of expenditure other than the routine expenditure. The allocation charges are received by the assessee at 25 paise per kilogram Of woollen yarn allocated by it to its various members. The, assessee is allotted by the Union of India a bulk quota of woollen yarn, imported as well as indigenous which is further allocated by the assessee to its various members. In this process, the assessee has to incur expenditure for procuring bulk quota as well as in making allocation to its members. During the accounting year ending on March 31, 1969 special subscription received was Rs. 24,176.12, annual subscription Rs. 1, 300 and allocation charges Rs. 69,329.82. During the next accounting year, the annual subscription was Rs. 5,600 and the allocation ....

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....s not a business activity within the meaning of section 28(i). The Tribunal, however, held that the assessee, even in the absence of intention to make profit, derived assessable income from specific services performed for its members inasmuch as its receipts of fees in respect of specific services rendered to its members exceeded the expenditure incurred by the assessee. The Tribunal further found that the annual subscriptions or special subscriptions were not relatable to the distribution of woollen yarn and the receipts of those two items would, therefore, not merit to be accounted towards income for the purpose of section 28(iii), Income-tax Act. Regarding the assessee's claim to exemption under section 11 (1)(a), Income-tax Act, the ....

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....tained because, by virtue of sub-s. (4) of s. 11, to property held under trust " includes a business undertaking so held and the matter has since been concluded by a recent decision of the Supreme Court in Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1. In that case, the assessee was the Surat Art Silk Cloth Manufacturers Association. Its aims and objects were asunder (headnote): "(a) to promote commerce and trade in art silk yarn, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth; (b) to carry on all and any of the business of art silk yarn, raw silk, cotton yarn, as well as art silk cloth, silk cloth and cotton cloth, belonging to and on behalf of its members; (c) to obtain import licences....