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TMI Blog1987 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee separate accounts were prepared for the said tour." The ITO brought to tax the aforesaid sum of Rs. 5,29,832 in the hands of the assessee-club by following his order for the assessment year 1977-78. The CIT (appeals) deleted the said sum, as he found that by a special resolution the Executive Committee of the assessee-club resolved to utilise the surplus money realised from the exhibition match for "distribution to Distressed Players' Benevolent Fund and to other Charitable Institutions", and that no part of the surplus funds were to be added to the club fund. He further found that certain receipts and expenses were shown out of gate receipts of the exhibition match in the subsequent assessment year and the actual surplus as ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income was not exempt in terms of section 10(23) of the Income-tax Act, 1961 (in short, the Act). It has been pointed out that the ratio of the Supreme Court decision in the case of Tollygunge Club Ltd. did not apply to the facts of the assessee's case as there is no finding either by the ITO or the CIT (Appeals) that the proceeds from the tickets issued for the exhibition match were to be utilised for public charities. It has further been pointed out that the resolution of the Executive Committee mentions about the surplus arising from the staging of the exhibition match. In other words, according to the departmental representative there is no diversion of income by an overriding title in terms of the resolution passed by the Executive C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e printing and distribution of some tickets. We may perhaps take the pride in accounting the following funds out of the gate proceeds of the above match : Rs. 1. Prime Minister's National Relief Fund 50,000 2. Chief Minister's Relief Fund 50,000 3. Dr. B.C. Roy Memorial Fund for Shishu Udyan 10,000 4. All India Football Federation 15,000 5. Indian Football Association 25,000 6. Women's Football Federation 5,000 7. B.D. Chatterjee Memorial Fund (A Gold Medal in the Memory of Late B.D. Chatterjee for the best player in the IFA Shield Final) 10,000 8. Distressed Footballer's B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. This has been explained by the Supreme Court in the case of CIT v. Sitaldas Tirathdas [1961] 41 ITR 367/374 as follows : "Where by the obligation income is diverted before it reaches the assessee, it is deductible but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow. It is the first kind of payment which can truly be excused and not the second. The second payment is merely an obligation to pay another a portion of one's own income, which has been received and is since applied. The first is a case in which the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of a portion of income to discharge an obligation', and not a case in which by an overriding charge, the assessee became only a collector of funds that is earmarked for charity. Applying the test laid down in the Supreme Court decision of Sitaldas Tirathadas's case, we hold that the CIT (Appeals) was wrong in his finding that the surplus derived from sale of tickets from the exhibition match played on 24-9-1977 with Cosmos Club of New York was not taxable in the hands of the assessee. 5. Next we come to the second ground of objection raised by the department. The CIT (Appeals) while scanning the facts relating to the objection of the assessee that the ITO was wrong in holding that the assessee made a profit of Rs. 5,29,832 through orga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess a source of income which has not been processed by the Income-tax Officer and which is not disclosed either in the returns filed by the assessee or in the assessment order, and, therefore, the Appellate Asstt. Commissioner cannot travel beyond the subject-matter of the assessment. In other words, the power of enhancement under section 31(3) of the Act, is restricted to the subject matter of assessment or the source of income which have been considered expressly or by clear implication by the Income-tax Officer from the point of view of the taxability of the assessee." Thus, the CIT (Appeals) cannot travel beyond the subject-matter of assessment but he is certainly competent to examine the whole assessment and it is open to him to cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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