TMI Blog2022 (11) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... he specific purpose that they are being given for. Moreover, as noted above, the donations are clearly not voluntary . The quantum of the cess, as well as the mode of computation thereof, has been decided by the Assessee and the Donor have no discretion or say in the matter. In Russel v. Vestry of St. Giles 3E B 416, Lord Campbell observed 'voluntary contributions' here do not mean annual subscriptions paid for value received or expected to be received by the party paying, but means a gift made from disinterested motives for benefit of others. In Society of Writers v. I.R. 2 TC 257 the Court held that the entrance fees and subscriptions paid by entrants to a society or institution as a condition precedent to their membership and as the price of admission to the privileges and benefits of the society or institution are given under a contract and are not voluntary. The Delhi High Court in the case of Divine Light Mission [ 2004 (4) TMI 25 - DELHI HIGH COURT ] held that membership fee and subscription amounts received by trust/society from its members cannot be characterized as voluntary contribution within meaning of expression fund in Section 12. We find no inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of the corpus donations and to explain the source of such donation. In response, the Assessee explained as under: WRITE UP ON DONATIONS (FORMING PART OF THE CORPUS OF THE TRUST) RECEIVED FROM MILK SUPPLYING SOCIETIES: Contributions are received from themilk supplying societies as decided in their Annual General Meeting of Dudhsagar Research And Development Association.At present, the milk supplying societies are giving Rs.2/- per Kg Fat supplied by them in every 10days milk cycle. The same is collected from their milk bill by Mehsana District Cooperative Mils Producers Union Ltd. as per Authorisation given by the concerned milk supplying societies and turn, the amount is paid by Mehsana District Cooperative Milk Producers Union Ltd. to Dudhsagar Research And Development Association by issuing a cheque. Dudhsagar Research And Development Association credits the same to the corpus as per direction given by the donor society. 4. The AO observed that the contribution was received from milk supplying societies (Donor MSS). The Donor MSS sell their milk to the Mehsana District Co-operative Milk Producers Union Ltd,(MDCMPUL), a parent body which is being processed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members, against the sales made by Donor MSS to MDCMPUL, and therefore, such fees / cess paid against sale of Milk does not qualify as donation. Also, such cess is not voluntary for the reason that firstly, the Donor is paying fees in lieu of the sales it makes to MDCMPUL and if the donor wishes to be avail services of the Association or its associates he has to pay the cess. Secondly the Donor MSS also does not haveany discretion regarding the quantum of fees which fixed by the Governing Council of the DURDA. Thus, the Ld. Assessing Officer concluded that the Cess receipts of DURDA cannot be termed as voluntary donation. The AO also observed that for any donation to be treated as corpus donation, it is necessary that a written direction from the donor is obtained in which donor has to clearly express his intention that the donation is made for the corpus of the organization. Expression of a particular intention can arise only when the concerned person has discretion to choose between options. Further the origin of such discretion comes from the knowledge that he is havingdifferent options. In the instant facts, thereis nothing at allto show that the donors had any knowledge in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution cannot be said to be voluntary. A voluntary contribution is one that is without any expectation and in donations that are made by contributors donors there is no quid pro quo involved. Here in this case, not only is the money received by the appellant not voluntary, but it is seen that it is received at a fixed rate and therefore by no stretch of imagination can the receipts he said to be a voluntary donation from the milk suppliers. There is a prescribed set formula behind the amounts being received by the appellant and thus these contributions cannot be: called donations but are very clearly fees that the milk societies are paying in exchange for certain services. The object of the appellant trust is to carry out research, development, running vetenerary hospitals, laboratories, establish life stock farms to improve their breeds, etc and the receipts that are received from the milk suppliers are thus very clearly revenue receipts that are generated out of the objects of the trust. These receipts are generated on recurring basis and are operational receipts. A perusal of a sample receipt of the milk supplier also shows that it merely states that the amount has been paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the rival contentions and perused the material on record. It would be useful to reproduce the Copy of Resolution passed by the assessee titled to discuss regarding donation received on per kg fat : Dt: 15/10/2012 No.DURD:559 Dudhsagar Research and Development Association, Mehsana Seal Copy of resolution passed at 45th Annual Ordinary General Meeting held on 24.06.2012:- Resolution No. 4: To discuss regarding donation received on per kg fat (in milk content). The resolution to collect donation of 0.50 paise more per kg fat from current financial year at Rs. 2/- in place of Rs. 1.5 made by Milk Producers Co operative Societies to Dudhsagar Research and Development Association (DURDA) to meet the cost of Dairy Science and Food Technology College as well new programmes was placed before general body to seek their approval. Accordingly, from the current year it is hereby resolved to collect fund from the Milk Producer Societies per kg fat (content of milk collection) True copy -sd- Secretary Dudhsagar Research and Development Association Mehsana 11. The contents of the above resolution clearly show that the contributions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the grants-in-aid were made by the Government to provide certain institutions with sufficient funds to carry on their charitable activities. On reading the conditions on which those grants-in-aid were given, it was obvious that the institutions or associations to which the grant was made had no right to ask for the grant and it was solely within the discretion of the Government to make grants to institutions of a charitable nature. Again, the Government did not expect any return for the grants given by it to such institutions and there was nothing which was required to be done by these institutions for the Government, which could be considered as consideration for the grant. Therefore, none of the conditions attached to the grant affected the voluntary nature of the contribution. Hence, the impugned grant was exempt under section 12. 13. The concept of voluntary contribution has been explained by N.D. Ojha C.J. speaking for the Division Bench (as his Lordship then was), in the case of CIT v. Madhya Pradesh Anaj Tilhan Vyapari Mahasangh [1988] 171 ITR 677 (MP) as (page 680) : The contributions, in order to be voluntary, had to be made willingly and without compulsion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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