1982 (6) TMI 75

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.... proceedings, the ITO found that Shri Punmiya filed the accounts of the Trust with regard to the loans given, but actually the trust had received these loans for the trustees from donation and was actually Hundi loans drawn on two firms in which the trustees were substantially interested; that it was seen from the details filed by the trustees that in M/s. Chandmal Harakchand and in M/s Nirmala Construction Corporation where the trustees and its relatives held 100% interest in these two firms; and the subsequent hundi loans of M/s. Champalal Kantilal & Co. also attracted provisions of s. 13(2)(a) as the trustees had substantial interest; that since these loans were not with adequate security, and it could be treated that the persons mention....

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....wn and received within few days on receipt of the cheques and hundi loans, it the previous year relevant for the assessment year under consideration. Therefore, from these facts, it is manifest that the provisions of ss. 11, 12, 13(1) & (2) of the Act are not applicable and as such, the aforesaid amount of donation cannot be taxed as income of the trust. The reason is that if the amount of donations or contributions which are made voluntarily and received by the Trust, created wholly for charitable purposes, under the direction of the donors or contributors that such amount shall form part of the corpus of the trust, then, such donations and contributions are not at all the income of the trust. In this case, the amount of donation of Rs. 26....