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TMI Blog1939 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... amber performs the same service of measuring and granting measurement certificates on merchandise to be shipped from the Port of Karachi. The learned Commissioner relies as an authority principally on the case of Liverpool Corn Trade Association, Limited v. Monks, (1926) 2 K.B. 10 no, distinguishing the well known case of New York Life Insurance Co. v. Styles ( Surveyor of Taxes), (1889) 14 A.C. 381, as being a case merely of payments into and drawings from a Common Fund, and National Association of Local Government Officers v. Watkins, (1934, 18 Tax Cas. 499, 503), as being a case of an unincorporated as distinct from an incorporated body. He also relied upon the cases of Last v. London Assurance Society Ltd., (2 Tax Cas. 100), and Municipal Mutual Insurance Ltd. v. Hills, (1931, 16 Tax Cas. 430, H.L.). For the assessee it is contended that the Commissioner has recognized the mutuality which in fact exists between the Chamber and its constituent members of firms by exempting subscriptions amounting to ₹ 13,140, and that the fact that the Chamber performs services for non-members does not destroy the mutual basis of the relations between them and its members, and that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make a profit out of himself. That is true, but I am not sure that it does not confuse us in this case. It is true to say that a person cannot make a profit out of himself if what is meant is that he may provide himself with something at a less cost than that at which he could buy it, or if he does something for himself instead of employing some one to do it. He saves money in those circumstances, but he does not make a profit. But a company can make a profit out of its members as customers, although its range of customers is limited to its shareholders. If a railway company makes a profit by carrying its shareholders, or if any other trading company, by trading with its shareholders, even if it is limited to trading with them, makes a profit, that profit belongs to the shareholders in a sense, but it belongs to them qua shareholders. It does not come back to them as share-holders upon their shares. Where all that a company does is to collect money from a certain number of people-it matters not whether they are called members of the company or participating policyholders-and apply it for the benefit of those same people, not as share-holders in the company, but as the people who s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by outsiders. My own opinion is that in the particular circumstances of this case this provision of a service to the public is not fatal to the assessee's case. I do not think any importance is to be attached to the fact that the services rendered by the Chamber to its members relate to business or trade. The nature of the services is not the test. A tennis or a golf club may be owned by a Company which may have shareholders and may have dividends, but it nevertheless makes a taxable profit. The test, in my opinion, is not the purpose of the Association but its nature. Is it of the nature of a club? Are its services solely for the benefit of its members, or, if not solely for the benefit of its members, are the services for its members and the cost thereof clearly separable from its services to non-members and the cost thereof? If yes, then there is no profit but merely a surplus or saving, if no, then there is a taxable profit or gain. There is in principle no difference between a club which provides a marker for tennis on payment by the individual club members and a Chamber of Commerce which suppliers a Measurer of merchandise on payment by its members. Both are employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to measure all merchandise, freight on which is ordinarily payable on measurement. Such measurement shall be taken: ii. No measurements shall be good except such as are taken by a Chamber Measurer, and with instruments bearing the stamp of the Chamber of Commerce. viii. Certificates of measurement shall be issued to Shippers /or to ship agents in such form and in such manner as the Committee for the time being shall, from time to time approve. ix. A fee, the amount of which shall in no case exceed one anna per bale, case or package, but which may be regulated by the Chamber from time to time, shall be levied on all merchandise measured by the Public Measurer. x. No merchandise shall be measured without the production of the Custom House Pass or a requisition in writing by the Exporter which must detail name of Shippers, name of vessel, number and marks of bales, case or packages, and destination and bearing the endorsement of the Measurement Fee Clerk to the effect that the fee has been paid. Members of the Chamber shall be permitted to run a monthly account provided they give an undertaking in writing to pay such monthly accounts on presentation. x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot profits or gains. But looking to the relatives of the case before us, it appears to me impossible to hold that members of the Chamber do not have recourse to the Public Measurer, despite his name, as members of the Association,: having recourse to an officer of the Association for whom they themselves pay. If members, instead of paying for each act of measurement paid an extra subscription of, say, ₹ 100 each irrespective of the services rendered to each particular member, it appears to me it would be difficult to say that their subscriptions were not exempt from taxation. It matters little, I think, that such payments are not made in a lump sum in advance and are proportionate to the services rendered. If the Chamber had kept two Measurers, one for its members supported by the members' subscriptions, and one for the public, it would not have been difficult to show that the members' subscriptions which paid for the members'. Measurer as distinct from the Public Measurer, were exempt from taxation ; it makes in practice, I think no difference if the payments for the service of the Measurers rendered to members and to non-members can be separated in the accounts. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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