TMI Blog2022 (7) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... bution made by assessee or the receipts transferred being directly in nexus with the income earned during the assessment year under consideration and the amount transferred. In our view, the surplus generated from conducting conference of the CSI would not become income in the hands of the assessee because this was a tool created by the CSI society and it in no way can be called application of income on diversion. As the assessee has already transferred these receipts to CSI, Headquarter Kolkata and CSI, Chennai chapter in the ratio prescribed as per byelaws and according to us, as ratio laid down by the Hon ble Supreme Court in the case of Sitaldas Tirathdas [ 1960 (11) TMI 17 - SUPREME COURT] the amount collected by assessee AOP for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. Brief facts are that the AO on perusal of income and expenditure account submitted by the assessee for the year ending 31.03.2016, noted that the total receipt of the assessee was to the tune of Rs.14,55,24,282/- and expenditure incurred was Rs.10,22,95,853/- and thereby resulting into excess of income over expenditure of Rs.4,32,28,429/-, being assessed as income of the assessee. The assessee replied that the assessee entity was formed with a specific purpose to conduct Annual Conference at Chennai during the year under consideration and the organizing secretary as well as scientific chairman constituted assessee AOP with the responsibility to conduct the conference as per the bye-laws of the assessee society. The assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the limited purpose of organizing the conference on behalf the central office (HQ) and the state chapter to make the transactions transparent and auditable. Thus there is no independent taxable income in the hands of the appellant. There is no receipt which is not accounted ultimately. The receipts are shown separately by the respective recipients on whose behalf the appellant conducted the event. The entity, consists of office bearers chosen from the Central office and state office of CSI and has not made any profit out of the above conference. This is clear from the audited accounts. The AO's argument that the constitution of trust has no role or any control over the appellant is incorrect as the constitution of the appellant e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nches and by establishing separate committee for conducting such annual conference. To conduct this 67th Annual Conference at Chennai, Article VIII of the constitution of CSI was proposed into and as per clause 8, the funds collected and after meeting expenditure of conference what income over expenditure remains, the surplus funds shall be revert back to the parent body namely Central CSI Fund and to the local branch in the ratio of 35:65. The ld.counsel for the assessee now before us drew our attention to relevant clause 15, which reads as under:- 15. The whole account of income and expenditure should be audited at the end of the conference after getting most of the receipts and the surplus money should be shared as per Constitution ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, Chennai Chapter CSI library, First Floor, Dept. of Cardiology, Rajiv Gandhi Govt. General Hospital, Chennai -600 003. Assessed to income tax in PANAAAAC4679C with ITO, Exemption Ward 2, Chennai. These were filed before AO also. 5.2 We noted that the payments made by the assessee entity in accordance with bye-laws / specific purpose for which it was constituted and the AO has not disputed the nature of contribution made by assessee or the receipts transferred being directly in nexus with the income earned during the assessment year under consideration and the amount transferred. In our view, the surplus generated from conducting conference of the CSI would not become income in the hands of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable. In our opinion, the present case is one in which the wife and children of the assessee who continued to be members of the family received a portion of the income of the assessee, after the assessee had received the income as his own. The case is one of application of a portion of the income to discharge an obligation and not a case in which by an overriding charge the assessee became only a collector of another's income. The matter in the present case would have been different, if such an overriding charge had existed either upon the property or upon its income, which is not the case. In our opinion, the case falls outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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