placed upou the resolution passed by the Board of Directors on January A 15, 1945 and the Deed of, Declaration of Trust dated October 3, 1950. The Income-Tax Officer rejected the contention and added the said amounts to the assessable income of the assessee-company in all the years. The appeals before the Appellate Assistant Conunissioner at the instance of the assessee-company proved unsuccessful. Further appeals to the Appellate Tribunal also proved futile. Before the Tribunal it was contended on behalf of the assessee that each customer who paid the 'Dharmada' amount was a settlor of the trust, that there were as many settlors as there were customers and that the assessee had received these amounts under an obligation to utilise the same for charity; it was pointed out that the resolution of the Board of Directors dated January 15, 1945 was merely a confirmation of the fact that the amounts l'!ere held in trust by the assessee and that the deed dated Octa~ ber 3, 1950 was merely a declaration of the acceptance of the trust by the two trustees mentioned therein; in other words, it was contended ·that the customers of the assessee created a trust by paying the amounis as 'Dharmada' and the amounts having been ear-marked for charitable purposes only they were not the assessee"s income. liable to tax. The Tribnnal negatived the claim of the assessee on two grounds, first, that the amcunts in question could not be regarded as having been received or held by the asses·see under a trust for charitable pwposes, the trust being void for vagueness and uncertainty and, secondly,. that the realisations partook of the character of trading receipts. At the instance of the assessee the matter was carried to the. High Court by way of two References, Income-tax Reference No. 329 /1964 being in relation tq the amount,,; concerned in the two assessment years 1951-52 and 195253 and Income-tax Reference No. 454/1965 being in relation to the amount concerned in the assessment year 1953-54. In the former Reference the High Court approached the question not from the angle of deciding whether the assessee could claim exemption from tax under s. 4(3) (i) of the Act in respect of the impugned amounts but whether the impugned amount' could be regarded as the profits or gains of the busine.. caITied on by the assessee under s. 10(1) of the Act; in othec words, in the opinion of the High Court the dispute related to the initial character of the receipt itself and the que1tion was whether the amounls paid by the ·customera ear-marked for charity were the assessee's income at all and following an earlier decision of a Division Bench of that vei;y Court in tho case of Agra Bullion Exchange Ltd. v. Commissio. of Income Tax,(1)_ the High Court held that the impugned amonnt. were never the income of the assessee at all and that the asaesseo was merely acting as a conduit pipe or clearing house tor passing on the amounts (I) (1961) 41 l.T.R. 472.
