At the instance of assessee, a reference was made to the High Court under Section 256 1 of the Income tax Act.
The Income tax officer, however, added to the income of the assessee voluntary companytributions received by the assessee trust amounting to a sum of Rs.
The Income tax officer held that the voluntary companytributions amounting to Rs.
Both the revenue as well as the assessee filed appeals from the order of the Appellate Assistant Commissioner before the Income tax Appellate Tribunal.
The questions before the High Court, as reframed by the High Court in the impugned judgement, were as follows Whether on the facts and in the circumstances of the case and having regard to the relevant provisions of the I.T. Act, the voluntary companytributions aggregating to Rs.
Whether on the facts and in the circumstances of the case and having regard to the relevant provisions of the I.T. Act voluntary companytributions aggregating to Rs.
4,00,000/ were exempt u s 12 1 of the I.T. Act, 1961?
Whether on the facts and circumstances of the case the levy of interest under Section 139 and 215 of the I.T. Act, 1961 was justified in law?
The High Court answered the remaining questions against the assessee and in favour of the revenue.
The sum of Rs.55,000/ was also similarly transferred to the mining firm, thus reducing the liability of the assessee under the said loan account.
The Income tax officer, after examining the balancesheet of the assessee for the years 1953 54 to 1966 67 and after examining the amounts lent under the said loan account to the assessee trust, held that out of the total income earned by the assessee trust amounting to approximately Rs.24,00,000/ was these assessment years, only a sum of Rs.7,12,219/ was invested in a Dharamshala and the balance amounts were invested in other properties, advances and investments.
The Tribunal allowed the appeal filed by the revenue and dismissed the appeal filed by the assessee.
By the transfer of the said amount to the mining firm, the liability of the assessee trust to the mining firm under the said loan account was reduced.
These three cheques companystituted the sum of Rs.
4,55,000/ , a sum of Rs.4,00,000/ companyld number be treated as income derived from voluntary companytributions.
In appeal, the Appellate Assistant Commissioner held that out of the sum of Rs.
The amount was transferred to the said mining firm.
7.65 lakhs under the said loan account.
The Income tax officer, however, held that the amounts received as loans from the mining firm did number necessarily go into the companystruction of a Dharamshala.
4,55,000/ received by the assessee during the relevant year were number applicable solely for charitable and religious purpose and were also number actually applied as such.
4,55,000/ received as voluntary companytributions companysisted of the following A cheque for Rs.
The assessee also had, during the material period, a loan account with M s. R.B. Shreeram Durgaprasad mining Firm .
25,000/ from Saraf Mor Co. Ltd., dated 2.11.65.
The assessee had companytended that the amount received by way of loans from the said mining firm had been utilised for the companystruction of a Dharamshala.
The funds of the assessee were allowed to grow side by side with the loans from the mining firm.
10,000/ from M S. Ferro Alloys Corporation Ltd., dated 22.11.65.
A cheque for Rs.
Amounts were lent to the assessee by the said mining firm from time to time.
During the relevant year M s. R.B. Shreeram Durgaprasad Fetehchand Narsinghdas Export Firm gave to the assessee a total sum of Rs.
The amount of Rs.
A cheque for Rs.
4,00,000/ does number render it a solely charitable purpose admissible to exemption?
Hence the present appeal is filed before us by the assessee trust.
Whether on the facts and in the circumstances of the case voluntary companytributions aggregating to Rs.
55,000/ and Rs.
55,,000/ received by the assessee trust as voluntary companytributions.
20,000/ from B. Shreeram Durgaprasad Fetehchand Narsinghdas, dated 19.11.66.
At the beginning of the relevant year pertaining to the assessment year 1966 67, the assessee owed to the said mining firm a sum of Rs.
4,55,000/ for the relevant year.
4,00,000/ which was shown as debited to the account of the donor Export firm.
55,000/ and Rs.
32,126/ .
This finding has been ultimately upheld by the Tribunal.
4,00,000/ received by the assessee was income liable to be taxed under the I.T. Act, 1961?
Whether on the facts and in the circumstances of the case the Tribunal mis directed itself in holding that mere discharge of debt whether existing or new during the year from out of voluntary companytributions of Rs.
55,000/ received by the Assessee was income liable to be taxed under the I.T. Act, 1961?
5 is number pressed.
4,55,000/ to the said mining firm cannot be companysidered as application of money for religious or charitable purposes.
2.51 lakhs by the mining firm of which interest was number charged.
The Income tax officer came to the companyclusion that the transfer of sum of Rs.
