9911796707
TMI Blog1921 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Club is liable under section 8 of the Act to pay income-tax in respect of its house property and Mr. Mackay, who appears on behalf of the Club, concedes that this is the case. The question which requires consideration is whether the. remainder of the income is taxable, it being admitted that no portion of the profits of the Club is derived from non-members. 2. Section 3(1) of the Act lays down that the Act shall apply to all income from whatever source it is derived, subject to certain exemptions specified in sub-section (2) , none of which apply to the present case. Section 5 enumerates 6 classes of income as chargeable to income-tax. The money received by the Club from its members does not fall within class (iv) , income deriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es [1889] 14 App. Cas. 381 That was a case relating to a life insurance company, the only members of which were the holders of participating policies, each of whom was entitled to a share of the assets and liable for all losses. The greater part of the surplus of the premiums received from members over expenditure was returned to the policy holders as bonuses, and the remainder was carried forward as funds in hand to the credit of the general body of the members. It was held by the House of Lords that no part of the premium income received from members was liable to be assessed to income-tax as profits or gains, a distinction being drawn between such income and that which was derived from non members. Lord Macnaghten said : I do not unders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only material point is that the Club derives no income from outsiders. 9. It is contended by Mr. Jai Lal on behalf of the Crown that the fade-that the Club is liable to pay income-tax in respect of house property occupied by its members negatives the view that income derived from the members is not fax-able. I do not see much force in this contention, as the tax is payable under section 8 of the Act in respect of the value of any house property of which the assessee is the owner, even though the property is occupied by the owner himself and is not bringing him any actual income, the reason for this being, doubtless, that such property is capable of bringing in a profit, whether it is actually doing so or not. 10. It is also pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto such a transaction is engaging in trade, so that the income accruing from the transaction is taxable as being income derived from business. 13. Take, on the other hand, the case of several persons joining in getting up a dance or giving a present, and subscribing for the purpose. It turns out that the total sum subscribed exceeds the expense incurred, and the surplus is returned to the subscribers. It would hardly be contended that such surplus would be liable to be assessed to income-tax, but if the argument advanced on behalf of the Crown were correct, the surplus would be taxable as the income or profit of the persons so associating (an association being, though not incorporated, a person as defined in the General Clauses Act) . ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
