TMI Blog1978 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The assessee is a registered firm of six partners having business in cotton with head office at Ahmedabad and branches, amongst various places, at Murkhed within Aurangabad District in Maharashtra. In this branch the assessee used to collect along with the sale price of cotton a sum termed "laga receipt" at the rate of 8 annas per Rs. 100 of the price of the cotton sold through them. A contention was advanced before the ITO that the amount of laga receipt collected by the assessee was not liable to tax as it was held by way of trust for application to charitable purposes. The ITO was not impressed by this contention and added the amount of laga receipt in each of the years to the assessee's income. Accordingly, for the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. The petitioner had created a fund for that purpose and dharmada collected by it had to be credited to that fund. In the circumstances we are of opinion that the amount so collected was not received by the assessee as its income." The Tribunal thereafter found, as a matter of fact, as under: "The facts in this case are identical, and we would hold respectfully, following the decision of the Full Bench of the Allahabad High Court in Takurdas Shyamsunder v. Addl. CIT [1974] 93 ITR 27 (All) [FB], that the Appellate Assistant Commissioner correctly excluded the laga receipts from the income of the assessee for these years." At the instance of the CIT, Gujarat, this reference is made by the Tribunal for our opinion on the question set o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." While rejecting this claim of the assessee, the ITO has not found that the nature of the impost was other than what was claimed by the assessee. It is also clear from the order of assessment for the assessment year 1968-69 that during the course of scrutiny of the balance-sheet it was noticed that a sum of Rs. 5,801 was shown as gam laga on the liability side of the balance-sheet of Murkhed branch of the assessee. We do not think that in view of this concurrent finding of fact, the revenue can have a grievance about the ultimate conclusion reached by the Tribunal. Even then we have examined the question, in the second place, from the, angle whether payments when made by the constituents of the assessee-firm at the time of sale of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of being applied to local charities. The surcharge when paid was clearly impressed with an obligation in the nature of trust for being applied for the benefit of local charities. It is settled law, as observed by this court in CIT v. Thakar Das Bhargava [1960] 40 ITR 301 (SC), that a trust may be created by any language sufficient to show the intention and no technical words are necessary and it may even be created by the use of words which are primarily words of condition. The only requisites which must be satisfied are that there should be 'purposes independent of the donee to which the subject-matter of the gift is required to be applied and an obligation on the donee to satisfy those purposes '. When the race-goers paid the sur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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