TMI Blog1986 (3) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... view was upheld by the AAC. The assessee filed appeal before the Tribunal. The Tribunal by its order dt. 24th Nov., 1980 in ITA No. 322/Bom/78-79, held that the profit making was not the predominant object of the assessee trust and as such, the income should be computed in accordance with the provisions in s. 11 of the IT Act, 1961. The Tribunal directed the ITO accordingly to pass consequential orders. When the matter went back to the ITO he found that the assessee has received Rs. 41,686 as entrance fees and had treated the said amount as capital receipt in the profit and loss account. The ITO was of the opinion that the said amount representing the entrance fees was income derived from the property held by the trust and as such, was incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the restrictions contained in the other portion of the said clause. Consequently. what we have to see is whether the entrance fee in question was "income derived from property held under the trust wholly for charitable purposes". It is not disputed that swimming bath is the property held by the Trust wholly for charitable purposes. It follows that all income derived from the said swimming bath would fall under cl. (a) of s. 11(1). As far as entrance fee is concerned, it is obviously income derived from the swimming bath in question. The fact that entrance fee does not represent periodical payment but represents payment made once for all for obtaining membership would not meant that the said amount did not represent income derived from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbership fee which was received only once and it was meant for expenditure for the permanent institutions, but it was not treated as the corpus by the assessee association was income of the assessee association and was assessable to tax, The principle laid down in the said decision would be applicable. In the present case also the amount of entrance fee has not been received towards the corpus of the assessee trust. The entrance fee is one specific category of income which was derived from the property held by the Trust Consequently, the ITO has not committed any error in treating the entrance fee as income derived from the trust property. 5. Section 12 to which the learned counsel for the assessee had referred lays down that any volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of gift to the trust or without any return or privilege. The payment of entrance fees conferred on the person making the payment certain privileges. Consequently, the amount representing entrance fees cannot be said to be voluntary contribution received by the assessee trust. However, that does not advance the case of the assessee any further. Under s. 12, voluntary contributions are deemed to be income provided they are not towards the corpus. This provision does not curtail in any way the meaning of the term "income" in s. 11(1)(a), of the Act. If a particular receipt is income within the meaning of s. 11(1)(a), the fact that the said item does not fall under s. 12 is immaterial. In the present case, as we have already stated., the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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