1977 (1) TMI 17

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..... ees from all its constituents to whom the goods were sold. The assessee claimed that the receipts under these heads were exempt because they had to be spent for the specific purposes for which they were realised from the constituents. The Income-tax Officer, however, disallowed this claim and brought the amounts realised under these heads to tax. This view was upheld by the Appellate Assistant Commissioner. The assessee took the matter to the Tribunal. The Tribunal, relying upon a decision of this court in Agra Bullion Exchange v. Commissioner of Income-tax [1961] 41 ITR 472 (All) and Bijli Cotton Mills Ltd. v. Commissioner of Income-tax [1970] 76 ITR 194 (All), upheld the assessee's claim. The Tribunal observed that the facts in these case .....

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..... es for which they were realised. The initial nature and character of these receipts, therefore, is not that of trading receipts. The Tribunal upheld the assessee's claim. At the instance of the Commissioner of Income-tax the Tribunal has referred the following question of law for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the receipts on account of mandir, gaushala and dharmada were trading receipts in the hands of the assessee?" Since then, a Full Bench of this court has considered this very question in the case of Thakur Das Shyam Sunder v. Additional Commissioner of Income-tax [1974] 93 ITR 27. That was a case relating to the customary levy of dharmada. The facts are identical, and the F .....

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..... heads for some other purposes, namely, for paying contribution to the political parties. We have examined the facts. It was only in the year 1969-70 in the case of the firm, Channu Lal Bal Krishna Das, that a small amount was spent for these purposes. This would not indicate that in fact the assessees have adopted a device to realise monies from its constituents in order to spend it for such purposes. At best this will amount to an instance of breach of trust which, it is settled law, does not destroy the trust itself. Therefore, the nature of the receipts cannot depend upon such diversion of application. It was argued that the Income-tax Officer had found that often the firm had less cash money in the kitty than the total balances under .....

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