The admission of authorised assistants and the enlistment of new companies by a mutual association do not constitute specific services performed for its members within the meaning of s. 10(6) of the Income Tax Act, and the fees received for such services are not remuneration definitely related to such services.

CHAKRAVARTTI, C.J.

1. THIS reference comes to us on a case stated by the Tribunal a second time in pursuance of directions given by this Court under s. 66(4) of the Indian IT Act.

2. THE assessee is a limited liability company incorporated on the 7th June, 1933, in order to take over the assets and liabilities of an unincorporated association, called "THE Calcutta Stock Exchange Association" and to conduct the affairs of the stock exchange which that association had founded. THE principal object of the assessee company is to facilitate the transaction of business on the Calcutta Stock Exchange and to make rules and bye-laws, regulating the mode and the conditions in and subject to which the business on the stock exchange shall be transacted. THE company is composed of "members" who may be either individuals or firms, but who, except in the case of parties who had, been members of the unincorporated association, have to be elected before their admission and upon such election, have to acquire a share of the company and pay an entrance fee. Upon their admission, the members have to pay a monthly subscription, as provided for in the bye-laws.

It is not disputed that in regard to its main activity, the assessee company is a mutual association and that it is not an insurance company or a co-operative society. The amounts received by the assessee from its members as entrance fee or subscriptions in respect of their own membership have not therefore been sought to be taxed. But in course of the assessment for the year 1945- 46, relative to the accounting year ended on the 30th Sept., 1944, a dispute arose between the taxing authorities and the assessee company as regards the taxability of four other items of receipts.

3. IT appears that under the bye-laws of the assessee company, members of a certain standing are allowed to have authorised assistants up to a certain numbers who are permitted the use of the its rooms and who may transact business therein the names of the members employing them. Like members, the authorised assessment also require to be elected. After the election of an authorised assistant, the member who has proposed to employ him, pays an entrance fee for his admission and, after his admission, goes on paying a monthly subscription so long as the employment continues. During the accounting year in question, the assessee company received from its members a sum of Rs. 60,750 as entrance fees of authorised assistants and a sum of Rs. 15,687 as subscriptions paid in respect of them.

4. IT appears further that under other bye-laws of the assessee company, no dealings in the shares of any company are permitted on the stock exchange unless the name of such company is included in the official quotations list, except when a special permission is given by the Full Committee. Applications for the inclusion of a new company in the quotation list are to be made by members and upon the approval of a new company by the full Committee on such application, the member applying for its inclusion has to pay a certain fee for its enlistment. During the accounting year in question, the assessee company received from its members a sum of Rs. 16,000 as fees for enlisting new companies. It also appears that a members firm apply for a change in its name and style. Before allowing such change, the assessee company holds an investigation under its bye-laws and, for such investigation, charges a fee. During the accounting year in question, it received from some of its members firms a sum of Rs. 600 as investigation fee in connection with applications for recognition of a change in their styles.

5. BEFORE the ITO, it was contended on behalf of the assessee company that the four sums of Rs. 60,750, Rs. 15,687, Rs, 16,000 and Rs. 600, were not taxable,. With respect to the first two sums, the argument was that authorised assistants of members were themselves members of the company and therefore monies received on their account as entrance fe