COMMISSIONER OF INCOME-TAX DELHI AJMER RAJASTHAN AND MADHYA BHARAT DELHI Vs. DELHI STOCK EXCHANGE ASSOCIATION LTD

JUDGEMENT

(1.) THE following question has been referred to us under Section 66 (1) of the Income Tax Act namely-"whether the admission fee of members or authorised, assistants received by the assessee is taxable income in its hands?"

(2.) THE assessee in this case is the Delhi Stock Exchange Association Limited, Delhi. It was incorporated in the year 1946 to acquire and take over as a going concern activities, functions and business of the Delhi Stocks and Shares Exchange Limited and the Delhi Stock and Share brokers Association. Limited and to promote and regulate the business of exchange of stocks and shares. It commenced business on the 1st March, 1948. The membership is limited, by the number of shares issued by the Company since every-member has to be a shareholder. A member is entitled to nominate not more than two persons as his authorised assistants or agents and one person as his authorised clerk on payment of a registration fee of Rs. 125/-for each nomination. Monthly and other periodical subscriptions are payable by members, authorised assistants and agents.

(3.) WHILE submitting its return for the assessment year 1950-51 the assessee company transferred a sum of Rs. 8,125/- received as admission fees from the members and authorised agents directly to the balance-sheet instead of including it in the profit and loss account. The Income-Tax officer came to the conclusion that as the admission fee payable by a member or an agent is not refundable and constitutes the assessee's income it is a receipt of a revenue nature which is assessable to income-tax. This order was upheld by the Assistant Commissioner in appeal.