1985 (11) TMI 16

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....come of the assessee ? " In respect of the assessment year 1971-72, the previous year ending on October 30, 1970, the assessee claimed a sum of Rs. 8,627 as money collected not as part of its income and, therefore, not liable to be taxed. The claim was disallowed and the amount was added. The contention of the assessee was that this sum was collected from its customers for the purpose of charity called " Shri Shubh Laga ". The Appellate Assistant Commissioner dismissed the assessee's appeal stating: " I have recorded in my order for the earlier year that the appellant was under no obligation, legal or practical, to hand over any part of its collections to any recognised charity. I have also pointed out that, in fact, large amounts hav....

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....ding of the Appellate Assistant Commissioner as regards the misutilisation of the funds. That is a question which ought to have been investigated, for the answer to that question would have determined the character of the funds collected. The mere fact that money had been collected supposedly for charity would not mean that such amount did not become part of the income. The question is whether income had accrued. Income did result, whatever be the label under which money was collected, if what was collected was treated as income. It is not the label that decides the question, but the character of the money collected. If what was supposedly collected as charity, by bearing that label, was in fact utilised by the assessee for purposes othe....