9911796707
TMI Blog1986 (7) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause 3 of the trust deed, are : (i) to provide medical aid of all types to the employees of the firm Shah Nanji Nagsi and their family members; (ii) to provide educational facilities to the children of the employees of the firm Shah Nanji Nagsi; (iii) to provide housing facilities to the employees either by way of rent or part thereof or by providing moneys to construct houses on co-operative basis or otherwise; (iv) to provide financial assistance to the employees looking to their needs either by way of loan with or without interest or otherwise; and (v) to provide for such other financial assistance as may be necessary for the well-being of the employees and their family members. The firm settled a sum of Rs. 5,000 initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and he accordingly completed the assessments. 5. The appeals before the AAC were disposed of by a common order dated 9-2-1984. Before him, there was a two-fold contention. One was that the trust was a charitable trust. The other was that the receipts being voluntary contributions do not constitute income and reliance had been placed upon an order of the Delhi Bench of the Tribunal in the case of Escorts Employees Welfare Trust v. ITO [1983] 5 ITD 226. The AAC held that the purpose of the trust cannot be held to be of a charitable nature, and that the exemption under section 11 was not available. The first point, therefore, failed. The first appellate authority also held that the contributions were not towards the corpus of the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dice to the generality of the provisions of section 56(1). It is no doubt true that section 56(1) apparently looks wider in scope. Section (24) which deals with the inclusive definition of 'Income' particularly mentions of voluntary contributions received by a trust created wholly or partly for charitable purposes, not being contributions made with a specific direction that they shall form part of the corpus of the trust vide clause (iia). It is true that section 2(24) is not an exhaustive definition. But it was the intention of the Parliament to bring into charge voluntary contributions received by a trust not for charitable or religious purposes should also be taken as income of that trust then there would have been a specific reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a trust is not its income under general law. As rightly pointed out by Shri Thakar, the trust had no right to demand any amount from the firm. The firm was under no legal obligation to make a payment in any year. If made, it was only in its discretion and sweet will. Such payments willingly made by the firm without compulsion can only be treated as a gratuitous payment, a gift or a donation. It is not that all the employees of the firm are automatically eligible to receive benefit. Only certain employees who are eligible according to conditions laid down in the trust deed can get the benefit of the trust. It is only in such cases the trustees have distributed the amounts to meet the objects of the trust. This is also a point which cannot a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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