1. The assessee who, during the assessment year 1962-63, to which the reference relates, was engaged in the business of manufacture and sale of washing soaps, collected from regular stockists of the soaps manufactured by the assessee and sold to them by him, half a per cent. of the sale price. This was separately shown in the relative bills as for Mummoorthy Vinayagar Charity. The total of the collections amounted to Rs. 2,270. No portion of this amount would appear to have been actually spent by the assessee towards the charity. The Tribunal, differing from the revenue, held that this amount did not form part of the assessee's income for the year. The Commissioner of Income-tax has brought up this reference :
' Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the sum of Rs. 2,270 was not includible as the income of the assessee? '
2. The question, in our view, borders almost on facts and we feel the reference should not have been entertained at all. Anyhow, we shall deal with it on the view that our opinion may be of guidance to the revenue. The collection was made by the assessee not generally from members of the public inclined towards charity, but was confined to the regular stockists of the soaps manufactured and sold to them by the assessee. The collection was at the rate of half a per cent. of the sale amount. This was shown separately in the bills and the purpose that it was for the Mummoorthy Vinayagar Charity was also mentioned in the bills. Can it be said from these facts that the contributories intended the collection to be a gift to the Vinayagar Charity constituting the fund as a trust for the purpose Creation of a trust includes conveyance of the ownership in the fund from the owner to the trustee and such transfer is voluntary and with a view to constitute the sum so transferred as a trust for a specific purpose. If these elements are satisfied, it may reasonably be taken that the collections made would not form part of the income of the collector of the funds. If, on the other hand, the payment made by the customers is not voluntary and is not intended as a gift to the Vinayagar Charity, but notwithstanding the fact that half a per cent. was shown in the bills separately for the purpose mentioned it was part of the bargain and, therefore, of the consideration therefor, the collection would in that case form part of the income of the person who receives the same. The effect of his showing itin the bill separately for the specified purpose would indicate only his intention to create a trust of the fund so collected out of his own income.
3. The Tribunal in approaching the problem does not appear to have applied its mind to the fact whether the collections were contributed by the contributories voluntarily and with a view to or with the intention of creating a trust, making the collector of the fund a trustee thereof for a specific purpose. The intention of the giver assumes importance especially in the case of contributories who belong to religious communities who do not believe in the purpose for which the contribution is made. In view of the failure of the Tribunal to direct its mind to the essentials in coming to a factual conclusion as to whether the collections constituted part of the assessee's income, we answer the question in favour of the revenue. But this does not mean that we express at this moment any view that the sum collected during the assessment year did or did not form part of the assessee's income. That question can be more satisfactorily decided only upon a finding on the essentials we have indicated above. It would, therefore, follow that the Tribunal will have to take the appeal on its file and dispose it of afresh in. the light of the observations contained in this judgment. If the Tribunal felt for any reasons to be indicated by it that, in its turn, it should remit the matter to the revenue for recording of evidence or for final disposal of the question, it would be at liberty to adopt that course.
4. In the particular circumstances, we make no order as to costs.