1975 (2) TMI 20

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....ssee started collecting donation from its members for the construction of "Congress Bhawan". Every member was required to pay Rs. 100 per wagon of coal allotted to him in pursuance of a resoluation dated July 12, 1961, passed by the executive committee of the assessee-association. The original resolution is in Hindi and when translated in English would read: " Resolved unanimously as per decision of brick-kiln owners that whosoever amongst the brick-kiln owners comes to the association, the secretary and the treasurer of the association shall charge from them a sum of Rs. 100 per wagon of coal allotted to them and that the sum so collected shall be paid to the District Congress Committee according to the latter's instruction." During ....

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....um of Rs. 100 in respect of each wagon of coal allotted to them, but the collection had no connection with the coal itself. It was neither the price of the coal, nor any charge incidental to the purchase of coal. The assessee never treated it as its trading receipt and did not credit it to the trading or profit and loss account. The amounts so realised by the assessee were kept in a separate account for being passed on to the District Congress Committee for the purpose of constructing a "Congress Bhawan". Even in the receipts issued to the members, the donation was separately shown as donation for "Congress Bhawan". The Appellate Assistant Commissioner of Income-tax has stated that for every wagon allotted to the members, the association us....

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....or charity by the trading members of the assessee-company never accrued as an item of income to the assessee at all. The amounts were given for charity and the assessee-company may be likened to a conduit pipe through whom the amounts passed." This view has been affirmed by this court in a later decision in Bijli Cotton Mills Ltd. v. Commissioner of Income-tax. We may make it clear that there is another class of cases where exemption from tax is claimed by an assessee, if the income arises out of assets held for charitable purposes. In those cases the receipt is admitted to be the assessee's income, but exemption is claimed because it arises out of assets held for charitable purpose and because of the provisions contained in the Act c....