1994 (3) TMI 59

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..... ciation and to strengthen the ties between the members corporately and the principals. 2. To develop business relationship mutually amongst the members. 3. To develop and strengthen fellowship amongst members. 4. To promote knowledge of scientific methods of sale promotion, service, market research, publicity, planning, statistics and display amongst Aspee Distributors. 5. In general, to undertake such activities of a temporary or permanent nature, as may be deemed necessary, for promoting the cause of trade, in particular, and to undertake such other measures which might contribute to the fulfilment of the above aims and objects. 6. To award prizes or incentives to agricultural graduates or progressive farmers with a view to enco .....

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..... e Income-tax Act, 1961. The Income-tax Officer held that the membership fees came under section 28(iii) of the Act and hence the surplus in the hands of the assessee was liable to be taxed. Ultimately, the matter came up before the Tribunal. The assessee contended before the Tribunal that the income derived by the assessee did not come under section 28(iii), because it was not received for rendering any specific services to its members. The Tribunal held that considering the aims and objects of the assessee-association as well as the activities carried on by it during the year under consideration, the membership fees were not received by the assessee for any specific services rendered by it to any one or more of its members and so the ass .....

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..... that the assessee-association was merely a trade association and not a trading association. Under section 28(iii) of the Income-tax Act, 1961, any income derived by a trade, professional or similar association from specific services performed for its members is chargeable to income-tax under the head "Profits and gains of business or profession". In the present case, the membership fee is not taken by the assessee-association for any specific services performed by it to its members. The Tribunal has commented that the assessee does not render any specific services to its members. In view of this fact as found by the Tribunal, it cannot be said that the membership fees are relatable to any specific services which are rendered by the assess .....

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