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4. Mr. Vaish, learned senior counsel submitted that the assessee, for the first time in the country, had brought to the retail investors the concept of securitisation of investments and by this innovative scheme it had enabled individual investors to entrust their funds for management by the assessee with a guarantee from the assessee that it would so manage the funds as to ensure a minimum return of 1.5 per cent per month to the investor even while ensuring that the investments made in the course of the management are fully securitised and are backed by bank guarantees. Counsel also submitted that the investors' moneys are not made part of the funds of the assessee-company's accounts, but are kept in a separate account termed "Viswapriya Funds Management Account--Bank Guaranteed Investments" and that a firm of chartered accountants has been appointed to function as fiduciary and custodian of the scheme and the accounts of that fund are also separately audited. The assessee, it was submitted, was only the fund manager which received a management fee at 6 per cent per annum from all the funds invested on behalf of the investors and that it has agreed to forgo a part of that management fee if the returns on the investment are insufficient to ensure the stipulated distribution at the rate of 1.5 per cent per month to the investors. If the return from the investments is in excess of the amount of management fee and the minimum guaranteed return for the investor, the assessee would become entitled to a performance incentive of 10 per cent of such excess. The cost of deployment of the funds was borne by the assessee out of its management fee. The fund provided by the investors, it was submitted, were employed in a bank guaranteed land deal and in discounting of bills which had been co-accepted by banks or were covered under bank letters of credit.

5. The offer memorandum issued by the assessee when it invited investors to contribute to entrust their moneys to the assessee for what has been referred to as funds management, sets out that the offer memorandum will form the contract between the investors and the assessee for the management on the investors' behalf of the funds provided by the investors under the memorandum for deployment in any investment, where all the investments are covered by bank guarantee and yield at least 1.5 per cent every month. The investor, under that memorandum, was to pay the amount to the assessee by cheques or drafts drawn in the name of "Viswapriya Funds Management Account-Bank Guaranteed Investments". That fund, it is stated in the memorandum, will be operated by the fiduciary of the scheme and/or the constituted attorneys. It further provides that the funds of the investor will be invested either singly or jointly with the funds of others, that the investment shall be redeemable within a maximum period of three years, that the named firm of chartered accountants will function as fiduciary and custodian who will be responsible for the safe custody of documents and for ensuring that the funds collected are deployed in accordance with the condition stipulated in the memorandum, ensuring that the bank guarantees are invoked in cases of default by the borrowers from the fund; that monthly payments are collected and distributed to the investors, the payment of management time of redemption/termination and to record transfers of interest in the investment certificate as and when notified by the investors.