1984 (3) TMI 21

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....rity collection on the bills constituted part of sale price and as such taxable income of the assessee ? 2. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in upholding addition of Rs. 4,734 as taxable income of the appellant on the ground that no trust has been created ? " M/s. Hari Industries (hereinafter referred to as " the assessee "), carries on the business of milling of sarson seeds (mustard), selling the oil and oil-cake. On each of the sales effected by it, it used to collect 6p. per. Rs. 100 by way of charity. These recoveries towards charity are effected through the sale bills. During the assessment year 1966-67, the total amount of such collections came to Rs.: 7,984. Out ....

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....hat these collections also formed part of sale proceeds. Since the ITO had allowed rebate under s. 80G of the Act, it also dismissed the appeal. The assessee filed an application under s. 256(1) of the Act for making a reference to the High Court and the Tribunal finding that there was divergence of opinion between the various High Courts on this point and since there was no pronouncement on this question by the High Court of Rajasthan, or by the Supreme Court, referred the two questions noted above for the opinion of this court. Notice was issued to the Department. We have heard the learned counsel for the assessee as well as for the Revenue and have also perused the record of the case. The learned counsel for the assessee has placed....

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....spend for charitable purposes, or even if the assessee did not keep the amounts in a separate bank account, the " dharmada " amount could not be held to be part of price. The assessee holds the amount in trust. The Supreme Court approved the cases of the Allahabad High Court in Thakur Das Shyam Sunday v. Addl. CIT [1974] 93 ITR 27 [FB] and of the Punjab High Court in CIT v. GheruLal Bal Chand [1978] 111 ITR 134 and followed its earlier authority in CIT v.Tollygunge Club Ltd. [1977] 107 ITR 776 (SC) and confirmed the decision of the Allahabad High Court in Bijli Cotton Mills Ltd. v. CIT [1970] 76 ITR 194. The Punjab and Haryana High Court in Nathu Ram Shiv Narayan v. CIT [1982] 134 ITR 625, has held that the definition of charitable purpose ....