TMI Blog1981 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... e following question of law to us for our opinion " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that Rs. 4,625 constituted, the assessee's income liable to tax ? " The assessee is a registered firm deriving income from the purchase and sale of utensils. During the assessment year 1972-73, the assessee collected dharmada from its consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the disbursement, specially mentioned above, the ITO disallowed the claim of the assessee. The assessee went up in appeal which was dismissed by the AAC on the ground that the amounts collected by the assessee had not been spent purely for the purposes of charity. The assessee went up in second appeal before the Income-tax Appellate Tribunal. This appeal was also dismissed by the learned Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge that only low-paid employees working in banks are allowed to form a recognised trade union. When donation is made to such a union, it merely allows the low-paid employees to put forth their demands for the betterment of their service conditions on collective basis. The donation made to a union remains a charity even though it is secular in nature.. The same considerations apply in the case of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accept the submission that the customers being illiterate did not appreciate that they were paying the amount with a view to create a trust, especially when it has been found that such payments were made pursuant to a custom which obtained in the commercial and trading community; indeed, being a customary levy, the constituents or customers, whether literate or illiterate, would be knowing that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or were carried to the profit and loss statement. Having regard to this position, it seems to us clear that the Tribunal's finding that no trust could be said to have been created by the customers in respect of the impugned amounts will have to be regarded as erroneous." We, therefore, answer the aforementioned question in the negative, i. e., in favour of the assessee and against the revenue. N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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