PETITIONER: PREMJI BHAI PARMAR & OTHERS ETC. Vs. RESPONDENT: DELHI DEVELOPMENT AUTHORITY & OTHERS DATE OF JUDGMENT21/12/1979 BENCH: <NAME>, D.A. BENCH: <NAME>, D.A. KRISHNAIYER, V.R. CITATION: 1980 AIR 738 1980 SCR (2) 704 1980 SCC (2) 129 ACT: Constitution of India 1950 Articles 14 & 32 & Delhi Development <ORG> Act 1957-<ORG> constructing flats and selling them to public-Levy and collection of surcharge as price of flat in addition to the construction cost- <ORG> to work on 'no profit no loss' basis-Such surcharge-Whether illegal-Discriminatory. HEADNOTE: The Delhi Development <ORG> Act was enacted to provide for the development of Delhi through Master and Zonal Plans. The authority undertakes constructions of dwelling units for people belonging to different income groups styled as Middle Income, Low Income, <ORG> and <ORG>. In 1971, the authority commenced registration of intending applicants desirous of having dwelling units in different Income Groups. Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it, for allotment of flats in deposits as required by the terms and conditions for <ORG> Scheme at Lawrence Road, Prasad Nagar and Rajouri Garden and made the initial deposit. The number of available flats being less in each scheme compared to the number of applicants registered, lots were drawn and the petitioners were informed that each of them should deposit the amount mentioned in the letter of allotment. The Petitioners paid the amount as intimated and consequently a flat was allotted to each of them and they entered into possession. In their writ petitions under Article 32 , the petitioners assailed the levy and collection of surcharge in addition to the cost price of the flats. It was con tended on their behalf that; (i) The treatment meted by the <ORG> is discriminatory inasmuch as no surcharge was levied on flats in <ORG> schemes constructed and allotted prior to November, 1976 and after January, 1977; (ii) As the authority formulates income-wise, area-wise schemes for constructing flats, there should be only income-wise classification wholly ignoring area and time factor for classification; (iii) Levying of surcharge runs counter to the object for which the authority was set-up namely to make available housing accommodation on "no profit no loss" basis; (iv) Surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not conform to any rational, tangible, scientific or understandable formula; (v) The Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same, it runs counter to the principle of fixing disposal price incorporated in resolution No. 209 dated November 26, 1974; (vi) Even if the Vice-Chairman had such power there is nothing to show that he has exercised this power and given direction for adding the surcharge to the disposal price and that therefore, the levy of surcharge is unauthorised; and (vii) that the authority has made a, huge profit by levy of surcharge. The respondents raised a preliminary objection that the petitions were not maintainable under Article 32 of the Constitution inasmuch as the petitioners have not come to the <ORG>. fol enforcement of a fundamental right conferred upon. 705 them under Part III of the Constitution but that the petitioners have invoked the jurisdiction of the <ORG> for the relief of reopening concluded contracts, and that if the court accepts the contentions, the petitioners would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for Flats at a lower price. The <ORG> should not therefore entertain the petitions. Dismissing the petitions, ^ HELD: 1. As the <ORG> has heard the petitions on merits it is not inclined to reject them on the preliminary objections. It is undeniable that camouflage of Art. 14 cannot conceal the real purpose motivating the petitions, namely to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained. Petition to this <ORG> under Art. 32 is not a proper remedy nor is the Supreme <ORG> a proper forum for re-opening concluded contracts with a view to getting back a part of the purchase price paid after the benefit is taken. [712 D-E] In the instant case it is difficult to appreciate how Art. 14 can be attracted. Cost price of a property offered for Sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. The authority is under no obligation to fix price of different flats in different schemes albeit in the same income group at the same level or by any particular statutory or binding formula. Those who opt to take flats in a particular income- wise, area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment In the same class may attract Art. 14. But to say that the <ORG> would be bound to offer flats income- group-wise according to the same price formula is to expect the <ORG> to ignore time, situation, location and other relevant factors which all enter the price structure. [713 E, 715 A-F] Radhakrishna Agarwal & Ors. v. <ORG> & Ors.  3 S.C.R. 249 at 255; <ORG> etc. v. <ORG>  3 S.C.R. 254, referred to. 2. In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the <ORG> to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. The experts alone can work out the mechanics of price determination, <ORG> can certainly not be expected to decide without the assistance of the experts. [715 F-G] Prag Ice & Oil Mills and Anr. etc. v. <ORG>,  3 S.C.R, 293 at 330; <CITATION>  1 S.C.R. 845; <CITATION> , etc.  3 S.C.R 760 at 782; referred to. 3. Price of land, building, material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Their cost varies time-wise, place wise and availability-wise. All these uncertain factors cannot be overlooked for the purpose of classification. It is not possible therefore to hold that allottees of 706 flats in <ORG> scheme at any place and executed at any time will form one class for the purpose of pricing policy. The only valid basis for classification would be income-wise, area-wise, time-wise, scheme-wise, meaning all flats constructed at or about the same time in same area in one project for particular income-group will form a class, and there is no discrimination amongst them. [716 G-H. 717 A-B] 4. Pricing policy is an executive policy. If the <ORG> was set up for making available dwelling units at reasonable prices to persons belonging to different groups it would not be precluded from devising its own price formula for different income-groups. If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the <ORG> undertaking, a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Art. 14. [717 B-D] 5. It is a well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a. violation of Art. 14. [717 <CITATION> ,  1 S.C.R. 404. 6. The principle of "no profit no loss" cannot apply either to every flat or to every scheme or to every piece of land developed by the <ORG>. It would be impossible for the <ORG> lo function on such fragmented basis and such a policy statement has not been made by the <ORG>. [718 D-E] 7. There is not the slightest or even a remote reference to "no profit no loss" formula for determining the cost price. A survey of the Regulations do not spell out any formula for price determination on the basis of "no profit no loss". Project-wise price fixation cannot be dubbed as arbitrary or discriminatory by comparing it with other projects at different places or at different times. [719 A-B JUDGMENT:

In the instant case after the work commenced and the actual cost estimate started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000/- which was approved by the Vice-Chairman on September 18, 1976. According to the revised estimate the approximate disposal cost for each flat. came tc Rs. 68.202/- and the cost of land per dwelling; unit was Rs. 7008/-. The revised estimate showed the disposal price of each flat as Rs. 75.200/-. The Commissioner of Income Tax who wanted to acquire 40 MIG flats in Prasad Nagar area offered the price of Rs. 75,000/- per flat which price was accepted. The difference between the cost price and the disposal price of Rs. 75,000/- per flat was treated as surcharge and the purpose was to use the extra money for extending price reduction benefit to The allottees of flats in <ORG>, <ORG> and <ORG> schemes. It is therefore difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational. [720 B-E, E-F] 8 . The Vice-Chairman is appointed by <ORG> as per Section. 3(3)(b) of the Act. He is a whole time officer and the Chief Executive of the <ORG>. The composition of the <ORG> as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of <ORG> and representatives of <ORG>. Three other persons, were to be nominated by <ORG> of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in favour of <ORG>. The <ORG> will practically supplant the <ORG>. By a process of elimination the <ORG> would supplant the <ORG> and the Chairman could constitute the <ORG>. Therefore, the Chairman enjoyed a very wide discretionary power. However once the power to delegate is given by the Regulations, the challenge to validity on the ground of delegation must fail. [720 G-H; 721 E-H, 722 A]

9. Resolution No. 209 is the one adopted by <ORG>. It takes note of the delegation of powers to fix disposal and hire-purchase price of flats to the Vice- Chairman and further provides that if there is a marginal saving in any scheme the amount be diverted to subsidies cost of <ORG> and <ORG> houses. The Resolution No. 200 of the <ORG> read with Resolution No. 709 of <ORG> sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with Section 59 clearly envisages such delegation of powers. [722 C-E]

10. The note of Accounts Officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000/- to the Commissioner of Income Tax for <ORG> and that should be the disposal price. This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice-Chairman Even if it includes surcharge it cannot be said with confidence that the Vice-Chairman has not approved has not approved the surcharge as a component of disposal price. [722 G-H]

11. The contention that the <ORG> has made a huge profit by levy of surcharge is without merits. On the contrary it appears that the overall working of the <ORG> is deficit ridden. [723 A-B] & ORIGINAL JURISDICTION: Writ Petitions Nos. 4660/78 & 562/79 (Under Article 32 of the Constitution).

<NAME> and <NAME> for the Petitioner in W.P. No. 4660/78.

<NAME>, <NAME>, <NAME> and <NAME> for the Respondent No. 1 in both the Writ Petitions.

<NAME> and <NAME> and <NAME> for the Petitioner in W.P. No. 562/79.

The Judgment of the Court was delivered by <ORG>, J. Allottees of flats, constructed by <ORG> ('<ORG>' for short), located at Rajouri, Garden, Prasad Nagar and Lawrence Road comprised in <ORG> scheme, question the decision of first respondent (Delhi Development. <ORG>) to collect surcharge as part of the sale price of each flat from each of them as unauthorized and discriminatory i character, in there two petitions under Article 32 of tho Constitution. Both the petitions raise identical contentions and i was said that Writ Petition No. 562 of 1979 is more comprehensive in character and, therefore, the facts alleged therein may be taken as representative character. They may be briefly stated.

<ORG> was set up under the Delhi Development Act, 1957. The Act was enacted to provide for the development of Delhi according to plan and for matters ancillary thereto and for carrying out the objects underlying the Act, the <ORG> has prepared Master and Zonal development plans for Delhi. With a view to easing the acute housing problems in the capital city the <ORG> undertakes construction of dwelling units for people belonging to different income groups styled as <ORG> ('MIG' for short), <ORG> ('LIG' for short), <ORG> and <ORG> ('<ORG>' for short). In 1971 the <ORG> commenced registration of intending applicants desirous of having n dwelling unit in different income groups. Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it and made the initial deposits as required by the terms and conditions. Petitioners had applied and got themselves registered for allotment of flats in MIG scheme situated at Lawrence Road. As the number of available flats in this scheme were less than the number of allottees registered, lots were drawn and the petitioners were informed that they have been allotted flats and that each of them should deposit the amount mentioned in the letter of allotment. It appears that the petitioners paid the amount they were called upon to pay and a flat was allotted to each of them and they have entered into possession. Petitioners now contend that the <ORG> being a statutory body formed with an object of working on 'no profit no loss' basis and having prescribed a formula for working out the cost price of flats has levied and collected a surcharge from each of the petitioner. According to the petitioners the cost price worked out in accordance with the formula prescribed by the <ORG> cost of each flat would be between Rs. 51,800 and Rs. 55,600 depending upon the area, extra balcony etc. However, each one of them had to pay between Rs. 56,000 to Rs. 60,000 and that according to the petitioners a surcharge varying from Rs. 3,400 to Rs. 6,000 for a flat has been illegally and unlawfully collected by way of premium or profit. It is further alleged that the <ORG> has not levied and collected such surcharge from other A allottees of flats in some other MIG Schemes and that this action of levying and collecting surcharge is violative of Art. 14 inasmuch as persons belonging to the same class, namely, allottees of flats in MIG Scheme have been unequally treated. It is also alleged that there was no valid or understandable justification of levying and collecting surcharge as price of flats comprised in MIG Schemes, between 1976 and 1977, and that from May 10, 1978, this unauthorised surcharge has been abolished. Petitioners also contend that the assertion of the <ORG> that this surcharge was levied and collected with a view to financing housing projects for lower income groups, <ORG> and <ORG> dwelling units so as to provide these weaker sections of the society, houses at a price lower than cost price with a view to making them affordable by such members of the weaker sections of the society, is belied by facts undisputed and that the whole attempt of the <ORG>, in violation of its avowed policy, was to make profit by levying such illegal surcharge. The petitioners, therefore, prayed for issue of a writ or order or direction declaring the levy of surcharge as illegal and unconstitutional and for a direction for refund thereof together with the interest at the rate of 12% per annum from the date of levy and collection till the date of refund.

In the cognate petition the petitioners are allottees of flats situated at Prasad Nagar and Rajouri Garden under MIG scheme and they complain that in their case surcharge varies from Rs. 19,200 to . 22,600.

Respondents to the petition are <ORG>, No. 1 and Chairman and Vice-Chairman of the Authoring, Nos. 2 and 3 respectively. In Writ Petition No. 4660/78 the <ORG> is respondent 1 and <ORG>, respondent 2. Petitions were mainly contested by and on behalf of the <ORG>.

The Delhi Development Act, 1957 ('Act' for short), was enacted as its long title shows with the a view to providing for the development of Delhi according to the plan and for arresting haphazard growth and for matters ancillary thereto. It envisages the setting up of an <ORG> to be styled as Delhi Development <ORG> which would be a body corporate by the name aforesaid having perpetual succession and a common seal with power 'o acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name, sue and be sued. The composition of the <ORG> is set out in sub-section (iii) of s. 3. Amongst others, Administrator of <ORG> would be an ex-officio Chairman and a Vice-Chairman to be appointed by <ORG>. The Vice-Chairman may be either a whole-time or part-time officer as <ORG> may think fit. Section S contemplates the constitution of <ORG> for the purpose of advising, the <ORG> on the preparation of the master plan and on such matters relating to the planning of development or arising out of or in connection with the administration of the Act. Section 5A which was added by amending Act 56 of 1963 confers power on the <ORG> to constitute as many committees consisting wholly of members or wholly of other persons or partly of members and partly of other persons and for such purpose or purposes as it may think fit. Chapter Ill-A which was inserted by the Amending Act of 1963 confers power for modification of the master plain once prepared. Chapter IV provides for development of lands. Chapter V confers power on <ORG> to acquire land for the purposes of development or for any other purpose under the Act under the provisions to the Land Acquisition Act , 1894, and further authorises <ORG> to transfer the land so acquired to he <ORG>. Chapter VI provides for finances and audit of the accounts of the <ORG> Chapter VII provides for supplemental and miscellaneous provisions. Section 52 confers power on the <ORG> to delegate any power exercisable by it under the Act, except the power to make regulations, on such officer or local authority or committee constitued under s. 5A as may be mentioned, by a notification to be published in the Official Gazette in such cases and subject to such conditions, if any, as may be specified therein. One more section of which notice should be taken is s. 57 which confers power on the <ORG> with the previous approval of <ORG> by notification in the official Gazette to make regulations consistent; with the Act and the rules made thereunder to carry out the purposes of this Act. Sub-s. provides that until the <ORG> is established under the Act any regulation which may be made under. sub-s. may be made by <ORG> and any regulation so made may be altered or rescinded by the <ORG> in exercise of its powers under sub-s. Section 58 makes it obligatory to lay every rule and regulation made under this Act before <ORG> in session for a period of 30 days and subject to any alteration or modification therein the rule or regulation shall after expiry of the prescribed period mentioned have effect only in such modified form or be of no effect as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or regulation.

Petitioners belong to <ORG>, each of whom registered himself as an intending applicant for a flat in <ORG> scheme and each of whom has been allotted a flat either in Rajouri Garden, Prasad Nagar or Lawrence Road. Number of persons desirous of having a flat registered with the <ORG> far outnumbered the available flats with the result that lots had to be drawn and the lucky ones got a letter of allotment to pay the price set out in the brochure in respect of each scheme and to obtain a flat. Each petitioner had paid the price and has entered into possession of the allotted flat. All the petitioners now contend that the <ORG> has levied and collected a surcharge as part o: purchase price of flat arbitrarily and without the authority of law and has collected the same from them in violation of its object of functioning on 'no profit no loss' basis and thereby made a huge profit. They further contend that they have been subjected to discriminatory treatment in contravention of Art. 14 of the Constitution inasmuch as no surcharge has been collected from allottees of flats in <ORG> schemes prior to November 1976 and subsequent to January 1977 except these three schemes and one Wazirpur <ORG> scheme. Further, no other <ORG> scheme flats have been subjected to such unauthorised levy of surcharge. It is pointed out that the levy of surcharge has been scrapped in 1978. The petitioners contend that levy of surcharge has no nexus to the object for which the <ORG> was set up namely, providing housing accommodation at reasonable price by the <ORG> whose declared policy is 'no profit no loss'. It was said on behalf of the petitioners that even if the <ORG> was set up for providing housing accommodation to the people in different income groups (keeping in view their financial capacity/affordability) yet a statutory body like the <ORG> operating on 'no profit no, loss' basis must have a scientifically prescribed formula for working out its price structure and that must be uniformly applied to all those who apply for flats and to whom they are allotted and such a statutory <ORG> cannot discriminate in working out the disposal price of the flats by including surcharge in respect of some <ORG> schemes within a certain specified period, a surcharge not authorised by law and not sanctioned by the <ORG> as a component of price and unknown to pricing of flats, while others similarly situated and similarly circumstanced and belonging to the same income group enjoyed the benefit cf getting flats at cost price and, therefore, petitioners have been accorded discriminatory treatment in the matter of price of flats allotted to them. Petitioners, therefore, contend that even if they applied for flats anc got registered and were offered flats and accepted the same at the price stated in the brochure and even if it has resulted in a concluded contract yet the <ORG> should not turn a blind eye to such gross discrimination by a statutory authority charged with a duty to provide housing accommodation acting on the declared policy of 'no profit no loss'. It was simultaneously contended that the Vice- Chairman of the <ORG> authorised to determine the prices of flats in each income group has not made any order or has not given any direction for levy of surcharge and that the levy of surcharge was wholly unauthorised.

A preliminary objection was raised by the <ORG> that the petitions are not maintainable under Art. 32 of the Constitution inasmuch as The petitioners have not come to the <ORG> for enforcement of a t fundamental right conferred upon the petitioners under Part III of the Constitution but the petitioners have invoked jurisdiction of this <ORG> for a relief of re-opening concluded contracts. It was also submitted that if the <ORG> accepts the contention of the petitioners they would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for flats at a lower price and, there fore, also the <ORG> should not entertain the petitions.

Though we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of Art. 14 cannot conceal the real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to this <ORG> under Art. 32 is not a proper remedy nor is this <ORG> a proper forum for re-opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken. The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the, <ORG> scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the <ORG>. One such brochure for ', allotment of <ORG> flats in Lawrence Road residential scheme is Annexure R-1. This brochure specifies the terms and conditions including price on which flat will be offered. It also reserved the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession. There is an application form annexed to the brochure. Annexure 'A' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively. It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor, first floor and second floor. The statement also shows the earnest money deposited at the time of the registration and the balance payable. It is on the basis of these brochures that the applicants applied for the flats in Lawrence Road and other <ORG> schemes. They knew and are presumed to know the contents of the brochure and particularly the price payable. They offered to purchase the flats at the price on which the <ORG> offered to sell the same. After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete. There is no suggestion that there was a mis-statement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the <ORG> on the strength of which they applied and obtained flats. How the seller works out his price is a matter of his own choice unless it is subject to statutory control. Price of property is in the realm of contract between a seller and buyer. There is no obligation on the purchaser to purchase the flat at the price offered. Even afar registration the registered applicants may opt for other schemes. His light to enter into-other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn. With this background the petitioners now contend that the <ORG> has collected surcharge as component of price which the <ORG> was not authorised or entitled to collect. Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Art. 32. And Art. 14 cannot camouflage the real bone of contention. Conceding for this submission that the <ORG> has the trappings of a <ORG> or would be comprehended in 'other authority' for the purpose of Art. 12 , while determining price of flats constructed by it, it acts purely in its executive capacity and "is bound by the obligations which dealings of the <ORG> with the individual citizens import into every transacting entered into the exercise of its constitutional powers But after the <ORG> or its agents have entered into the field of ordinary contract, the relations are no longer governed by the Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art. 14 or of any other constitutional provision when the <ORG> or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the. terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the <ORG> in the contractual field which is apart from contract" (see <CITATION> .) Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. hey were advised by the brochures to look at the flats before going in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat. I The <ORG> in its affidavit in reply in terms stated that it is. willing to take back the fiats and to repay them the full price. The transaction is complete, viz., possession of the flat is taken and price is paid. At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re-open and wriggle out of a concluded contract only partially. In a similar and identical situation <ORG> in <NAME> & <ORG>. v. <ORG> has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this <ORG> under Art. 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained. However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the <ORG> is discriminatory inasmuch as no surcharge was levied on flats in <ORG> scheme constructed and allotted prior to November 1976 and after January 1977. <ORG> flats involved in these petitions were constructed and were available for allotment in November 1976 and the lots were drawn in January 1977. There is one more <ORG> scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied. The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, <ORG>, LIG, et . those in the same income bracket form one class even for the purpose of determining disposal price of flat allotable to them irrespective of situation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye. It is difficult to appreciate how Art. 14 can be attracted in the circumstances hereinabove mentioned. Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. Except the submission that the <ORG> has a proclaimed policy of constructing and offering flats on 'no profit no loss' basis which according to Mr. <NAME> has a statutory flavour in the regulations enacted under the Act, the <ORG> is under no statutory obligation about its pricing policy of the flats constructed by it. When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners. The obligation that regulations are binding on the <ORG> and have provided for a statutory price fixation formula on 'no profit no loss' basis will be presently examined but save this the <ORG> is under no obligation to fix price of different flats in differed. schemes albeit in the same income group at the same level or by any particular statutory or binding formula. The <ORG> having the trappings of a <ORG> might be covered by the expression 'other authority' in Art. 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Those who opt to take flats in a particular income- wise area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract Art. 14. But to say that throughout its course of existence the <ORG> would be bound to offer flats income-groupwise according to the same price formula is to expect the <ORG> to ignore time, situation, location and other relevant factors which all enter the price structure. In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the <ORG> to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. The experts alone can work out the mechanics of price determination; <ORG> can certainly not be expected to decide without' the assistance of the experts (See <ORG> and <ORG> v. <ORG>) In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the executive and unless it is patent that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid.

This Court in <CITATION> ,(l) approved the following dictum of <NAME> on Constitutional Law, page 587:

"The <ORG> does not have to tax everything in order to tax something. It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably . . . <ORG> has been practical and has permitted a very wide latitude in classification for taxation.

What is forbidden by Art. 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme-wise, allottees of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that Art. 14 is violated cannot be entertained. Therefore, in the <CITATION> , etc., <NAME>, J., speaking for the <ORG> observed as under:

"A reasonable classification is one which includes all who are similarly situated and none who are not. The question then is what does the phrase 'similarly situated' mean ? The answer to the question is that we must look beyond the classification to the purpose of the law. A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law. The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good."

Is the classification income-wise scheme-wise violative of Art. 14 in any manner ? The <ORG> formulates income- wise area-wise schemes for constructing flats. Petitioners contend that there should be only income-wise classification wholly ignoring area and time factor for classification. They say that allottees of flats in all <ORG> schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats. There. is no merit in this contenting. What are price determinants ? Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Their cost varies time-wise, place-wise, availability-wise. All these uncertain factors cannot be overlooked for the purpose of classification. Therefore, it is not possible to hold that allottees of flats in <ORG> scheme at any place and executed at any time will form one class for the purpose of pricing policy. only valid basis for classification would be income-wise, area-wise, time- wise, scheme-wise, meaning all flats constructed at or about the same time in same area in one project for particular income-group will form a class. And there is no discrimination amongst them.

Pricing policy is an executive policy. If the <ORG> was set up for making available dwelling units at reasonable price to persons belonging to different income-groups it would not be precluded from devising its own price formula for different income-groups. If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the <ORG> undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply or can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Art.

14. People in, the <ORG> can be charged more than the actual cost price so as to give benefit to allottees of flats in <ORG>, <ORG> and <ORG>. And yet record shows that those better off got flats comparatively cheaper to such flats in open market. It is a well recognised policy underlying tax law that the <ORG> has wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of Art. 14 , (see <CITATION> ). Can it be said that classification, income-wise-cum-scheme-wise is unreasonable ? The answer is a firm no. Even the petitioners could not point out unequal treatment in same class. However, a feeble attempt was made to urge that allottees of flats in <ORG> scheme at Munirka which project came up at or about the same time were not subjected to surcharge. This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 the policy of levying surcharge was resorted to and t-hat in <ORG> schemes pertaining to period prior to November 1976 and later April 1977 no surcharge was levied.

If a certain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it cannot be the foundation for a submission why such policy was not adopted earlier or abandoned later.

It was, however, said that levying of surcharge runs counter to object for which the <ORG> was set up, namely, to make available housing accommodation on 'no profit no loss' basis. The argument proceeds on the assumption that the principle of 'no profit no loss' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat. Principle of 'no profit no loss' has been explained by the respondents. It IS said that in the over- all working, planning and execution of projects which the <ORG> undertakes as part of development of Delhi, the integral part of it being construction of flats for different income-groups the motives and working of it would not be profit oriented but would work on 'no profit no loss' economic doctrine. This would not for a moment suggest that the principle of 'no profit no loss' should apply either to every flat or to every scheme or to every piece of land developed by the <ORG>. It would be impossible for the <ORG> to function on such fragmented basis and such a policy statement has not been made by the <ORG>. Of course, some public statement appears to have been made that the overall working of the <ORG> is on "no profit no loss' basis. Respondent 1 has been able to point out that the <ORG>'s housing scheme, as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal authority takes over municipal services the <ORG> spends for the same and incurs cost. Apart from that petitioners have not been able to show that the <ORG> is actuated by commercial profit oriented approach in its overall working.

It is, however, necessary to examine the contention whether this 'no profit no loss' policy statement has any statutory flavour as contended by Mr <NAME>. The regulations styled as the Delhi Development <ORG> (Management and Disposal of Housing Estates) Regulations, 1968, ('Regulations' for short) are framed in exercise of the powers conferred by s. 57 and were laid before <ORG> as required by s. 58 . Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the <ORG> for such property. There is not the slightest or even a remote reference to 'no profit no loss' formula for determining the cost price. A quick survey of the Regulations do A not spell out any formula for price determination on the basis of 'no profit no loss'. Whether the power to determine disposal price is in <ORG> will be presently examined. Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the <ORG> and as price has been fixed by the delegate of the <ORG> even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the <ORG>.

It is at this stage necessary to examine the contention that in the case of Wazirpur and Munirka LIG schemes which came up during this very period no surcharge was levied and, therefore, there is invidious discrimination amongst members of the same class. Again the argument proceeds that income- wise classification alone is valid. Here time-wise (November 1976 to January 1977) classification is relied upon. It is an admitted position that no surcharge is levied on <ORG> flats at Munirka. The affidavit in reply shows that the land on which flats are constructed in Munirka <ORG> scheme turned out to be very rocky with the result that the construction cost in respect of flats at Munirka <ORG> scheme worked out at Rs. 456 per plinth area per metre whereas in respect of Lawrence Road it came to Rs. 401.54 p. Only. The <ORG>, therefore, thought that if surcharge is levied on flats under <ORG> scheme in Munirka area the disposal price would be very high and would be beyond the reach of <ORG>. It is in this background of the special facts that 'no surcharge was levied in respect of any flat in <ORG> in Munirka area. Project-wise price fixation cannot be dubbed as arbitrary or discriminatory in comparison with other projects at different places.

It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed of- without levying surcharge as component of sale price. It is pointed out in affidavit in reply that those flats were handed over to <ORG> for meeting their needs for staff quarters and that was done in the year 1978. It is also pointed out that the Government charged half the price of the land in respect of these 132 flats and, therefore, surcharge was not levied. There is two-fold fallacy in this submission. Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public interest. Government has not got any undeserved benefit at the cost and risk of petitioners. Hence their complaint in this behalf is without merits.

It was next contended that surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any rational, tangible, scientific cr understandable formula. How the figure of surcharge has been worked out has been explained in detail in affidavit in reply. Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats in Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs 1,09,97,100 was sanctioned. After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000 which was approved by the Vice-Chairman on September 18, 1976. According to the revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwelling unit was Rs. 7,008. Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice- Chairman have been set out in the affidavit in reply. The subsequent revised estimates show that disposal price of each flat would be Rs. 75,200. In the meantime <ORG> wanted to acquire 40 MIG flats in Prasad Nagar area and the same were offered at the price of Rs. 75,000, per flat. Commissioner of Income Tax accepted the price. This became the starting point for working out the disposal price in that period. The difference between the cost price and the disposal price of Rs. 75,000 per flat was treated as surcharge and the purpose was to use the extra money for extending cost reduction benefit to the allottees of flats in <ORG>, <ORG> and <ORG> schemes. Affidavit in reply of the Secretary of Respondent 1 provides further information which show that the cost price would be Rs. 78,000. Therefore, at best the component of surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden MIG flats. Similarly, with regard to MIG flats at Lawrence Road the actual cost price would be in close proximity of the disposal price would be in close proximity of the disposal price charged from the petitioners. It is, therefore, difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.

The next contention is that Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974. The Vice-Chairman is to be appointed by <ORG> as per s. 3(3)(b) of the Act. It appears that this Vice-Chairman is whole-time officer and will be the Chief Executive of the <ORG>. This becomes clear from regulation 3 of the Regulations which provides as under:

"3. These regulations shall be administered by the Vice-Chairman, subject to general guidance and resolutions of the <ORG>, who may delegate his powers to any officer of the <ORG>".

Thus the Vice-Chairman, subject to general guidance and resolutions cf the <ORG>, shall administer the regulations. He can delegate the functions to any officer of the <ORG>. Regulation 59 is important which reads as under:-

"59. The <ORG> may delegate all or any of its powers under these regulations to the Vice-Chairman or to a whole time member".

Armed with this power of delegation the <ORG> adopted Resolution No. 60 dated February 21, 1970 which reads as under:

"Resolved that the recommendations of the <ORG> be approved and all the powers of <ORG> be exercised by the Housing <ORG> and the Chairman, <ORG> be authorised to constitute the said committee, determine the organisational set-up and take (sic) all efforts for implementing the housing and allied schemes".

Serious exception was taken to this gross abdication of its powers and functions by the <ORG>. The composition of the <ORG> as set out in s. 3 would include such persons as <ORG> Member, Engineering Member, representatives of <ORG> and representatives of <ORG> as and when set up. Three other persons were to be nominated by <ORG> of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in favour of <ORG>. The <ORG> will practically supplant the <ORG>. But the more objectionable part of Resolution No. 60 is that such <ORG> which is to enjoy all powers and functions of the <ORG> was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the <ORG> but to determine organisational set up and then make all efforts for implementing the housing and allied schemes. It is really difficult to appreciate such whole-sale abdication or delegation of powers by a statutory authority in favour of a <ORG> whose composition would be determined by one man, the Chairman. By a process of elimination the <ORG> could supplant the <ORG> and the Chairman could constitute <ORG>. Therefore, the Chairman enjoyed a very wide discretionary power. Though Mr. <NAME> did challenge the validity of Resolution No. 60, Mr. <NAME> in cognate petition refrained from doing so. Once the power to delegate is given by the Regulations the challenge to validity on the ground of delegation must fail It is, however, necessary to examine the submission whether Vice-Chairman could have permitted levy of surcharge as a component of the price of flats in MIG schemes. In this connection it would be advantageous to refer to Resolution No. 20 dated June 18, 1968. Of the <ORG> by which the recommendations of the Standing <ORG>, inter alia, empowering the Vice-Chairman to approve forms of application as well as to fix the disposal and hire-purchase price were accepted. Resolution No. 209 is the one adopted by the <ORG>. It takes note of the delegation of powers to fix disposal and hire-purchase price of flats to the Vice-Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidies cost of <ORG> and <ORG> houses. It seems the Resolution is for information of the <ORG> and the <ORG> has merely resolved that the information be noted. The Resolution No. 200 of the <ORG> with Resolution No. 209 of the <ORG> sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with s. 59 clearly envisages such delegation of powers. It is, therefore, idle to contend that the Vice-Chairman had no authority to levy the surcharge as component of disposal price of flats.

It was next contended that even if Vice-Chairman had such power there is nothing to show that he has exercised this power and that, therefore, somewhere without any authority someone has added the surcharge to the disposal price and that, therefore, the levy of surcharge is unauthorised. The submission seems to be factually incorrect. The note of Accounts officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000 to the Commissioner of Income Tax for <ORG> and that should be the disposal price This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice-Chairman. There fore, the price of Rs. 75,000 as the disposal price is approved by the Vice-Chairman. Even if it includes surcharge it cannot be said with confidence that the Vice-Chairman has not approved the surcharge as a component of disposal price.

The last contention is that the <ORG> has made a huge profit by levy of surcharge. In this connection statistical table was annexed to the petition and there was serious controversy about the facts and figures set out therein, by the other side. Having gone through the detailed affidavit in reply it transpires that the contention is without merits. Therefore, there is no substance in the contention that the <ORG> has made a huge profit. On the contrary it appears that the overall working of the <ORG> is deficit ridden.

These were all the contentions in these petitions and as there is no Merit in any of them the petitions are dismissed. There will be no order as to cost <ORG> Petitions dismissed.


PETITIONER: COMMISSIONER OF INCOME TAX, (CENTRAL) DELHI,NEW DELHI Vs. RESPONDENT: <ORG>, HATHRAS., ALIGARH DATE OF JUDGMENT07/11/1978 BENCH: <NAME>, P.N. BENCH: <NAME>, P.N. TULZAPURKAR, V.D. CITATION: 1979 AIR 346 1979 SCR (2) 241 1979 SCC (1) 496 ACT: Indian <ORG> Act . 1922 s. 4(3)(i) & s. 10(1) - Assessee collected moneys on sale of goods under the head "<ORG>"-Kept the amount in a separate account-Created a trust-Utilised time money for charitable purposes-Whether amount realised could be regarded as assessee's income- "<ORG>" Trust whether void as vague and uncertain. Words & Phrases-"Dkarmada" meaning of. HEADNOTE: The assessee realised certain amounts of money on account of <ORG> (charity) from its customers on sale of yarn and bales of cotton which was its principal business. The amounts so realised were shown in a separate column headed "<ORG>" in the bills issued to customers. Without taking them into its trading account, the assessee, credited these amounts to a separate account known as "<ORG>" account. The Board of Directors of the company created a trust and declared that all moneys standing in the "<ORG> Account", and realised on this account in future should be treated as trust fund and utilised by the trustees for such religious and charitable purposes as may be decided by them. For the assessment years 1951-52, 1952-53 and 1953-54 the <ORG> officer addled the amounts realised under the head "<ORG>" to the assessable income of the assessee. The assessee's appeals to the Appellate Assistant Commissioner were dismissed. On further appeal <ORG> held that the trust was void for vagueness and uncertainty and that the realisations partook of the character of trade receipts. On reference, <ORG> held that the amounts were never the income of the assessee, that the assessee was merely acting as a clearing house for passing the amount to the trust, that the fact that it was a compulsory levy did not make it a trade receipt, that "<ORG>" was a customary levy prevailing in some parts of the country and where it was paid by the customers to a trading concern, the amount was not paid as a price for the commodity sold to the customer. In appeal to this Court it was contended on behalf of the <ORG> that the realisations being a compulsory levy, they must be regarded as a part of the consideration or price of the goods purchased by the buyers and that gift for "<ORG>" was void for vagueness and uncertainty. Dismissing the appeals, ^ HELD: 1. The impugned realisations made by the assessee from ib customers for ''<ORG>'' being entirely earmarked for religious or charitable 242 purposes would not be regarded as the assessee's income chargeable to income tax. [256F] 2. A gift to the "<ORG>" or "<ORG>ya" both in common parlance as well as the customary meaning attached thereto among the commercial and trading community cannot be regarded as void or invalid on account of vagueness or uncertainty. When the customers or the brokers paid the impugned amounts to the assessee earmarking them for "<ORG>" these payments were validly earmarked for charitable purposes. In other words right from the inception these amounts were received and held by the assessee under an obligation to spend the same for charitable purposes only, with the result that these receipts could not be regarded as forming income of the assessee. [253H-254B] Though there is some justification for holding that a gift to "Dharma" simpliciter would be invalid on grounds of vagueness and uncertainty, a gift to "<ORG>" would be definite, the object being certain viz., for religious or chartiable purposes. In common parlance the expression "<ORG>" or "Dharamadaya" cannot be said to be vague or uncertain and as such a gift to "<ORG>" (<ORG>ya) would not be invalid for vagueness or uncertainty. [251 E-F] 3. While the word "Dharma" is indefinite and equivocal, the word '<ORG>ya" is quite definite. The former means either law or virtue or legal duty or moral duty, the latter means an endowment or gift for religious or charitable purpose. Similarly while the expression "Dharma" is idefinite and equivocal the expression "Dharmarth" has only one meaning viz., anything given for charitable or pious purposes. [251C-D] 4. Apart from the fact that the concept of "<ORG>" or "<ORG>ya" in common parlance means anything given in charity or for religious or charitable purposes among the trading or commercial community in various parts of this country, a gift or payment for "<ORG>" is by custom invariably regarded a gift to charitable purposes. [252C] 5. Since a gift or payment for "<ORG>" is by commercial or trading custom invariably regarded as a gift for charitable purposes there is no question of there being any vagueness or uncertainty about the object for which such gift or payment has to be utilized.  6. Since the realisations are not a part of the price or surcharge on the price but payments for a specific purpose of being spent no charitable purposes, they cannot be regarded as trading receipts of the assessee. [255g] 7. The amount of "<ORG>" is a payment which a customer is required to pay in addition to the price of the goods which he purchases from the trader but the purchase of the goods by the customers would be the occasion and not the consideration for the "<ORG>" amount taken from the customer. Al though without payment of "<ORG>" amount the customer may not be able to purchase the goods, but that would not make the payment of "<ORG>" involuntary inasmuch as it is out of his own volition that he purchases the goods from the trader. The "<ORG>" amount is, therefore, not a part of the price but a payment for the specific purpose of being spent on charitable purposes. [255C-E] 243 8. Even if the assessee had not kept these amounts in a separate bank account, A admittedly a separate "<ORG> Account" was maintained in the books of the assessee in which every receipt was credited and payment made out on charity was debited. <ORG> had clearly found that all these amounts were never credited in trading account nor carried over to profit and loss statement. [256E] <CITATION> .,  107 ITR 776; followed. <CITATION> ,  41 ITR 473, Ranchordas v. <NAME>, 26 IA 71; <NAME> v. Moti Ram, ILR 18 Bom 136; <CITATION> .,  93 ITR 27; <CITATION> , 111 ITR 134, Advocate General of Bombay v. <NAME>, ILR 41 C Bom. 181; <CITATION> , 14 ITR 144 referred to. <CITATION> , 7 STC 652; <CITATION> , 31 STC 108 distinguished. Prof. <NAME>'s Glossary of Judicial and <ORG> Terms: Molesworth's Dictionary (Marathi-English) Second Edition (1975) referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1328 and 1329/73 & 2059/71.

(From the Judgments and orders dt. 18.11.69 and 21.1.70 of <ORG> in Income Tax-Reference Nos. 320/64 and 454 131 of 1965).

<NAME> and <NAME> for the appellant. <NAME>, <NAME>, <NAME> and <NAME> for the respondent in CA 2059/71.

<NAME>, <NAME>, <NAME>, <NAME>

<NAME> and <NAME> for the respondent in CA 1328- 1329/73.

The Judgment of the Court was delivered by TULZAPURKAR, J.-These three appeals are preferred on certificates of fitness granted by <ORG> under ss. 66-A of the Indian Income Tax Act, 1922. They raise a common question whether the amounts realised by the assessee-company from its customers as and l`or 'Dharmada' during the three assessment years 1951-52, 195253 and 1953- 54 are liable to be taxed as its income under the Act and the question arises in the following circumstances.

The assessee is a private limited company having been incorporated in the year 1943. It carries on the business of manufacturing and selling yarn. Right from the inception it used to reales certain amounts on account of 'Dharmada' (charity) from its customers on sales of yarn and bales of cotton. The rate was one anna per bundle of 10 lbs. Of yarn and two annas per bale of cotton. In the bills issued to the customers these amounts were shown in a separate column headed 'Dharmada'. The assessee did not credit the amounts of 'Dharmada' so realised by it in its trading account but it maintained a separate account known as the "Dharmada Account" in which realisation on account of 'Dharmada' were credited and payments made out were debited from time to time. It appears that at a meeting of <ORG> of the assessee-company held on January 15, 1945, the Board passed a resolution that the, moneys standing in the 'Dharmada Account" be treated as trust fund of which <NAME> and <NAME>, two Directors of the company, be the trustees and it was further declared that all the money realised in future by the company on sale of yarn from the purchasers at the rate of one Anna per bale or such rate as may be decided in future be handed over to the trustees for being utilised in such altruistic, religious and charitable purposes as may be decided upon by them, and that the trustees shall in particular utilise such funds for the advancement of education and the alleviation of misery and sickness of the public in general as it think fit. Subsequently, OH October 3, 1950 the said two Directors executed a Deed of Declaration of Trust wherein it was stated that a sum of Rs. 85,000 had accumulated in the charity fund maintained by the trustees and it was declared that the amount did not belong to any individual but it was trust money of which the executants were trustees and it will be utilised by them for altruistic, religious or charitable purposes.

During the previous year (being the calendar year 1950) relevant to the assessment year 1951-52, the total amount received by the asses see-company in the "<ORG> Account" as aforesaid amounted to Rs. 21,898/-; similarly during the previous year (being the calendar year 1951) relevant to the assessment year 1952-53 the company collected from its customers a sum of Rs. 17,242/- on account of '<ORG>' and a sum of Rs. 904/- for the same purpose from the brokers and interest was also credited to this account amounting to Rs. 4,010/-, while during the previous year (being the calendar year 1952) relevant to the assessment year 1953-54 the assessee received a sum of Rs. 19,490/- as <ORG>' from its customers and a sum of Rs. 4578 was also credited on account of interest in the "<ORG> Account". IN the assessment proceedings for the assessment years 1951-52, 1952-53 and 1953-54 the assessee claimed that the aforesaid amounts Lying to the credit of the "<ORG> Account" were held in trust by it and were ear-marked for charity and as such they were not its income from business liable to tax and in support of this contention reliance was placed upon the resolution passed by <ORG> 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 Commissioner at the instance of the assessee-company proved unsuccessful. Further appeals to <ORG> also proved futile. Before the <ORG> it was contended on behalf of the assessee that each customer who paid the '<ORG>' amount was a settlor of the trust, that there were as many settlors as there were customers and that the assessee had receive(' these amounts under an obligation to utilise the same for charity; it was pointed out that the resolution of <ORG> dated January 15, 1945 was merely a confirmation of the fact that the, amounts were held in trust by the assessee and that the deed dated October 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 amounts as '<ORG>' and the amounts having been ear-marked for charitable purpose only they were not the assessee's income liable to tax. The <ORG> negatived the claim of the assessee on two grounds, first, that the amounts in question could not be regarded as having been received or held by the assessee under a trust for charitable purposes, 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 <ORG> by way of two References, Income- tax Reference No. 329/1964 being in relation to the amounts concerned in the two assessment years 1951-52 and 195753 and Income-tax Reference No. 454/1965 being in relation to the amount concerned in the assessment year 1953-54. In the former Reference <ORG> 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 amounts could be regarded as the profits or gains of the business carried on by the assessee under s. 10(l) to the Act; in other words in the opinion of <ORG> the dispute related to the initial character of the receipt itself and the question was whether the amount paid by the customers ear-marked for charity were the assessee's income at all and following an earlier decision of a Division Bench of that very Court in the case of <CITATION> tax,(l) <ORG> held that the impugned amounts we never the income of the assessee at all and that the assessee was merely acting as a conduit pipe or clearing house for passing on the amounts (1) (1961) 41 I.T.R. 472.

to the objects of charity. It took the view that the <ORG> erred in holding that the levy for 'Dharmada' was in the nature of a surcharge on the price charged for sale of yarn and cotton and that in its opinion the fact that it was a compulsory levy ipso Facto did not impress the same with the character of a trading receipt. <ORG> pointed out that the amounts realised by the assessee on account of 'Dharmada' were never treated as trading receipts or as a surcharges on the sale price which was evident from the fact that such realisations were never credited to their trading account nor shown in the profits and loss statement for any year. It further observed that it was well-known that the "Dharmada" was a customary levy prevailing in certain parts of the country and , where it was paid by the customers to a trading concern the amount was not paid as price for the commodity sold to the customer. In this view of the matter <ORG> answered the questions in favour of the assessee and against the <ORG>. Following this decision, <ORG> answered the question raised in the latter Reference also in favour of the assessee. The Commissioner of Income Tax, Delhi (Central), New Delhi has challenged the aforesaid view of <ORG> before us in these appeals.

Counsel for the <ORG> raised a two-fold contention in support of these appeals. In the first place he contended that since the realisation or recovery of 'Dharmada' amounts by the assessee from each of its customers was a compulsory levy such payments from the customers' point of view must be regarded as a part of the consideration or price for the goods purchased by them to from the assessee. He urged that such compulsory levy would be in the nature of a premium or surcharge on the price and as such will have to be regarded as a trading receipt. In that behalf reliance was placed upon two decisions, one of <ORG> in <CITATION> ,(') and the other of <ORG> in <CITATION> ,(1) where similar amounts charged by the assessee as and by way of 'Dharmam' in the former case and 'Mahimai' in the latter case were held to be part of the price includible in the taxable turnover of the assessee. Secondly, he contended that it is well-settled that a gift for 'Dharma' or 'Dharmada' is void for vagueness and uncertainty and, therefore, when the 'Dharmada' amounts were paid by the customers and received by the assessee these amounts could not be regarded as "property held under trust or other legal obligation for charitable purposes" within the meaning of s. 4(3) (i) of the Act and in this behalf strong reliance was placed upon the meanings given to the expressions (1) 7 S.T.C. 652.

(2) 7 S.T.C. 108.

Dharma' and '<ORG>' in Prof. <NAME>'s Glossary of Judicial & Revenue Terms, the decision of <ORG> in <NAME> v. Parvatibai(ll) and the decision of <ORG> in <NAME> v. Moti Ram.(2)Apart from this legal position he sought to support the <ORG>'s finding that no trust could be said to have been created by the customers on the basis of certain factual aspects-(a) the customers paid the amounts not voluntarily but out of compulsion, (b) the customers being illiterate did not appreciate that they were paying the amounts with a view to create trust, (c) there was no control over the assessee as regards the manner in which and the time when it should spend for '<ORG>' and (d) the assessee did not keep these amounts in a separate bank account-separate from its business assets. He therefore, urged that no trust of these realisations could be said to have been created and as such these realisations were rightly regarded by the. <ORG> as part of the assessee's trading receipts liable to be included in its assessable income.

On the other hand, counsel for the assessee contended that it was the initial character of the receipt in the hands of the assessee that was important, that the amounts when paid by the customers, over and above the price for the goods purchased from the assessee, were paid for 'Dharmada' (i.e. for charity) and were received by the assessee as such; in other words, the receipts from the inception were impressed with the obligation to spend the same only on charitable objects. He contended that the two concepts of 'Dharma' and 'Dharmada' were distinct from each other and though a gift to 'Dharma' may be void on grounds of vagueness and uncertainty, a gift to 'Dharmada' would not be void inasmuch as the concept of 'Dharmada' was not vague or uncertain especially when a gift to 'Dharmada' was by commercial or trading custom invariably regarded as a gift to charitable purposes, and in this behalf strong reliance was placed by him upon Full Bench decision one <ORG> in <CITATION> (2) and the decision of <ORG> in <CITATION> ('), where such customary meaning of 'Dharmada' among the trading community has been judicially recognised. He further urged that the compulsory nature of the payment, did not affect or alter the initial character of the receipts which were earmarked for charity and, therefore such receipts could not be regarded as trading receipts, (1) 26 I.A. 71.

(2) I.L.R. 18 Bom. 136.

(3) (1974) 93I.T.R. 27.

(4) 111 I.T.R. 134.

not being any part of the price nor even a surcharge on the price. I n support of his contentions counsel strongly relied upon the decision of this Court i n <CITATION> .(1).

Having regard to the rival contentions noted above, it seems to us clear that. there are two aspects that are required to be considered fol determining the question raised in these appeals but in a sense the two aspects are so inter-related that they would represent the two sides of the same coin. The one aspect is what is the true nature or character these receipts, whether they constitute a part of the price received by the assessee while effecting sales of yarn or cotton and are, therefore, trading receipts of the assessee ? The other aspect is whether these realisations are property held under trust or other legal obligation for charitable purposes or not ? And this depends upon whether the ear-marking of these payments for 'Dharmada' creates a valid trust of obligation to spend the same only on charitable objects ? But in the facts and circumstances of the case it is obvious that these receipts would not be trading receipts only if at the time these are received they are held under a trust or other legal obligation to spend the same for charitable purposes. In other words if the legal obligation to spend the same for charitable purposes is void and, therefore, non-existent the receipts or the realisations may have to be regarded as trading receipts in the hands of the assessee. That being the position, in our view, the approach adopted by <ORG> to determine the question at issue cannot be regarded as correct. As pointed out earlier, <ORG> approached the question from the angle of deciding whether the impugned amounts realised by the assessee could be regarded as the Profits and gains of the business carried on by the assessee under s. 10(l) of the Act, impliedly suggesting that a claim for exemption for such amounts under s. 4(3) (i) of the Act was unnecessary or irrelevant and that the dispute merely related to the initial character of the receipt itself and following the decision in <ORG> case (supra) it held that the amounts in question which were paid by the customers ear-marked for charity were not trading receipts and were never the income of the assessee at all It is clear that the while making this finding <ORG> assumed that the customers while paying these amounts had validly ear-marked them for charity. Since the <ORG> had specifically raised a dispute that the receipts of 'Dharmada would neither create a valid trust nor a valid legal obligation to spend the same for charitable purposes, 'Dharmada' being a vague and uncertain concept, <ORG> could not, in our (1) (1977) 107 I.T.R. 776.

view, come to the finding that these realisations were not trading receipts unless it further found that ear-marking for '<ORG> was a valid ear-marking for charity. In our view, therefore, both the aspects of the question are required to be considered for the purpose of arriving at a correct decision thereon.

Therefore, the first question that arises for our consideration is whether a gift to Dharmada' is void on grounds of vagueness or uncertainly ? The answer to this question will depend upon what is the true meaning of the expression 'Dharmada' and is the concept of 'Dharmada' as vague or uncertain as the concept of 'Dharma' ? The two allied concept of 'Dharma Anna Dharmada' will have to the considered together. It is true that as early as in 1899 <ORG> in Runchordas Vandrawandas C. and others v. <NAME> and others (Supra) declared a bequest or a gift to 'Dharma' (Dharm) simpliciter to be void, the concept being vague and uncertain and in that behalf <ORG> relied upon the meaning of that expression given in Prof. <NAME>'s Glossary of Judicial and Revenue Terms, where the expression is stated to mean 'law, virtue legal or moral duty'" derived from the Sanskrit verb 'Dhri' meaning 'to hold', that which keeps a man in the right path. Accepting the aforesaid meaning of the expression 'Dharma', <ORG> observed thus:

"In Wilson's Dictionary "Dharam" is defined to be law, virtue, legal or moral duty .. The object which can be considered to be meant by that word are too vague and uncertain for the administration of them to be under any control."

By this decision <ORG> gave its impramatur to the view which prevailed in the Presidencies of Bombay and Calcutta for the past 50 years that gifts to 'Dharma' simpliciter were invalid. The reason for the decision was the oft-quoted principle that all charities were the special care and under the direct control of <ORG> and that the <ORG> must refuse to accept as "charity" any gift which by reason of the vagueness in which it was expressed left the <ORG> m doubt as . to how it was to be applied. However, in a later Bombay case, namely, the <CITATION> .(3) <NAME>, J., felt that in this country 'Dharma' did mean roughly and almost invariable in the cases which had come up for legal decisions just "charity" and nothing else and observed:

"It is true that an oriental's idea of charity might be a little wider and looser than that of the Lord Eldon, particularly amongst the lower and more illiterate classes of Hindus and (1) I.L.R. 41 Bom. 181.

17-817 SCI/78 <NAME>; but a liberal use of the convenient doctrine of cypress which is surely elastic enough to reach almost anything which Judges wish to reach, might have validated the technical defects and cured the infirmity."

It may be stated that with a view to give effect to the popular concept of the word 'Dharma' a Bill was introduced (being Bill No. 10 of 1938 published in the Gazette of India Part V. dated 17.9.1938) but it was presumably dropped as it fell under "Religious and Charitable Endowments" in List II of the Government of India Act, 1935, which was a Provincial subject. Thereafter the State of Bombay enacted(l Bombay Public Trust Act being Act No. XXIX of 1950 which is now in operation in the States of Maharashtra and Gujarat. By title Explanation to s. 1() it has been enacted that a public trust created for such objects as "Dharma, Dharmada, Punyakarya or punyadan" shall not be void only on the ground that the objects for which it is created are unascertained or unascertainable; in other words, in the areas where legislation similar to the Bombay Public Trust Act would be in operation bequests or gifts for religious or charitable purposes, expressed in terms for "Dharma, Dharmada, Punyakarya, punyadan, etc." would not fail on ground of vagueness or uncertainty. However, in areas where such legislation is not in force bequests or gifts to 'Dharma' simpliciter would continue to be void on ground of vagueness or uncertainty.

In the above context it will be interesting to point out that in <CITATION> (l) <ORG> has taken the view that where instead of 'Dharma' the testator used the English word 'Charity' that word without any qualifications or limitations denoted public charity and as such the bequest was held to be a valid charitable bequest falling within the definition of "charitable purposes" in s. 4(3) (i) of the Act.

Turning to the concept of 'Dharmada' ('which is the same as 'Dharmadaya') the question is whether that concept could be said to be as vague as the concept of 'Dharma'. In Prof. <NAME>'s Glossary the expression 'Dharmada' or 'Dharmadaya' is stated to be the vernacular equivalent of the Sanskrit expression 'Dharmada' or 'Dharmadaya' and the expression 'Dharmada' is explained thus:

"Dharmadeo, corruptly, Dharmadow, (from Dan or Daya, donation) An endowment, grant of food, or funds or funds, for religious or charitable purposes".

(1)14 I.T.R. 144 Two other allied expressions, namely, 'Dharmakhaten' and 'Dharmarth' are explained thus:

"Dharmakhaten, (Marathi) The head of accounts under which pious or charitable gifts are entered." Dharmarth, (Sanskrit) Any thing given for charitable or pious purposes. "

In Molesworth's Dictionary (Marathi-English), Second Edition, reprinted 1975, the expression 'Dharmadaya' or 'Dharmadav' is stated to mean "an alms or a gift in charity".

If the respective meanings of the two expressions 'Dharma' and 'Dharmada' as given in the above dictionaries are compared, it will appear clear that that the former is indefinite and equivocal whereas the latter is quite definite; the former means either law, or virtue or legal duty or moral duty but the latter only means an endowment or gift for religious or charitable purpose. Similarly, if the expression 'Dharma' is compared with the expression 'Dharmarth' it will be clear that the former is indefinite and equivocal while the latter has only one meaning, namely, anything given for charitable or pious purpose. The Marathi expression 'Dharmakhaten' means the head of accounts under which pious or charitable gifts are entered. From the above discussion it appears to us clear that though there is some justification for holding that a gift to 'Dharma' simpliciter would be invalid on ground of vagueness and uncertainty, a gift to 'Dharmada' (Dharmadaya) would be definite, the object being certain, namely, for religious, or charitable purposes. In common parlance, therefore, the expression 'Dharmada' or 'Dharmadaya' cannot be said to be vague or uncertain and as such a gift to 'D-harmada' (Dharmadaya) would not be invalid for vagueness or uncertainty Counsel for the <ORG>" however, strongly relied upon the decision of <ORG> in <NAME> v. <NAME> (supra) where that <ORG> has taken the view that a bequest in favour of 'Dharmada' is void by reason of uncertainty. After going through the arguments of counsel in that case and the decision of the <ORG>, it appears to us clear that the <ORG> has accorded a literal and derivative meaning to the word 'Dharmada' in that 'Dharmada' means property set apart for 'Dharma' and having regard to such derivative Meaning accorded to that expression, the <ORG> has taken the view that there is no real distinction between a bequest to be expended on 'Dharmada' and a bequest for 'Dharma'. As against its literal and derivative meaning, the expression 'Dharmada' (Dharmadaya) in common parlance means, as mentioned in Prof. <NAME>'s Glossary and Molesworth's Dictionary, an endowment or gift for religious or charitable purposes and we are inclined to accept the latter popular meaning that is invariably accorded by Orientalists to the expression 'Dharmada' (Dharmadaya) and as such in our view a gift to 'Dharmada' or payment for 'Dharmada' must be regarded as a gift or payment for religious or charitable purposes and such a gift or payment would not be invalid for vagueness or uncertainty.

Apart from the fact that the concept of 'Dhramada' or 'Dhramada in common parlance means anything given in charity or for religious or charitable purposes, it cannot be disputed that among the trading or commercial community in various parts of this country a gift or payment for '<NAME>' is by custom invariably regarded as a gift to charitable purposes. <CITATION> (supra), a Full Bench decision of <ORG>, the question was whether, when the assessee, who carried on business as a commission agent, charged on every transaction of sale of goods worth Rs. 100/- a sum of 15 paise from the person to whom goods were sold and 10 paise from the person whose goods were sold as '<NAME>' and credited the amounts thus collected. in a separate '<NAME>' account which was held by him, to be utilized specifically and exclusively for charitable purposes, the amounts so collected by him were liable to be included in his assessable income or not ? <ORG> held that the said amounts were not includible in the assessable income and were not chargeable to income-tax. <ORG> took the view that in order to determine whether a particular receipt, by whatever name it was called, was or Was not the income. Of a4 assessee, its real nature and quality had to be considered and if it was received under a custom, the answer to the question depended on the nature of the obligation created by the custom. The assessee's specific case was that in the District of Shahjahanpur there was a custom according to which the commission agents realised '<NAME>' from their constituents and spent the same on charity and this specific case was not controverted by the <ORG>, presumably because the <ORG> was aware that such a custom did obtain in the trading community. It was contended on behalf of the <ORG> that the ownership of the fund realised by way of <NAME>' rested entirely in the assessee who was free to spend the. amount according to his own discretion, and, therefore, the assessee's position qua the '<NAME>' account was not that of a trustee. Rejecting this contention <ORG> observed thus:

"We are unable to accept the submission that as the owner, ship of the amounts credited to the '<ORG>' account vests in the petitioner and it enjoys some discretion with regard to its disposal it cannot be said that its position is not that of a trustee. The question whether the position of the petitioner, when he received the amount, was that of a trustee or not will depend upon the actual custom which obliged the constituents to pay <ORG>. As stated earlier, the petitioner's case that the amount realised as <ORG> has got to be spent on charity has not been controverted by the respondents. Under the law relating to trust, legal ownership over the. trust fund and the power to control and dispose it of always vests in the trus- tee. Accordingly, merely because in this case the legal owner ship over the amount deposited as <ORG> vested in the peti tioner, it cannot be said that its position was not that of a trustee. Discretion vested in a trustee to spend the trust amount over charities will not affect the character of the deposit."

The above <ORG> decision of <ORG>, it can fairly be said, amounts to a judicial recognition of the custom of collecting 'Dharmada' amounts by traders from their customers or constituents which casts an obligation on the traders to spend the same only on some charitable purpose. In other words, a gift or payment for 'Dharmada' is by commercial or trading custom invariably regarded as a gift for charitable purposes and as such there is no question of there being any vagueness or uncertainty about the object for which such gift or payment has to be utilized. Counsel for the <ORG> sought to contend that the custom referred to in <NAME> case (supra) should be regarded as being prevalent only in the District of Shahjahanpur from which the case arose. It is not possible to accept this contention, for, it is common knowledge that such customary levy for 'Dharmada' is frequently collected by traders from their customers in several parts of the country. similar custom creating the obligation to spend the 'Dharmada' amounts exclusively on charitable purposes was invoked or resorted to by <ORG> in the case of <CITATION> (supra) where the assessee who carried on business in Districts of Abohar. <NAME> and <NAME> in Punjab & Haryana realised 'Dharmada' amounts from his constituents and the Court held that the assessee was acting more or less as a trustee of such amounts and as such these were not includible in his assessable income.

Having regard to the above discussion, we are clearly of the view that a gift to 'Dharmada' or 'Dharmadaya' both in common parlance as well as by the customary meaning attached thereto among the commer-

cial and trading community cannot be regarded as void or invalid on account of vagueness or uncertainty, and it is, therefore, clear that when the customers or brokers paid the impugned amounts to the assessee ear-marking them for 'Dharmada' it must be held that these payments were validly ear-marked for charitable purposes. In other words, right from inception these amounts were received and held by the assessee under an obligation to spend the same for charitable purposes only, with the result that these receipts cannot be regarded as forming any income ofthe assessee.

The next aspect requiring consideration is whether because of the compulsory nature of the levy the impugned amounts charged to the customers and received by the assessee Could be regarded as a part of the price or a surcharge on the price as contended by the counsel for the <ORG> ? In our view, this question is covered by the decision of this <ORG> in <ORG> case (supra). In the case the respondent club conducted horse races with amateur riders and charged fees for admission into the enclosure of the club at the time of the races; a resolution was passed in 1945 at the general body meeting of the club for levying a surcharge; of eight annas over and above the admission fees, the proceeds of which were to go to <ORG>; this resolution was varied by another resolution dated January 30, 1950 to the effect that the surcharge should be ear-marked "for local charities and not solely for <ORG>"; every entrant was issued two tickets, one, an admission ticket for admission to the enclosure of the club, and the other, a separate ticket in respect of the surcharge of eight annas for local charities; the question was whether receipts on account of the surcharge were to be treated as the respondent's income for the assessment year 1960-61; <ORG> and the High <ORG> on a reference held that the respondent's receipts from the surcharge levied on admission tickets for purposes of charity could not be included in the respondent's taxable income. On further appeal, this <ORG> held, confirming the decision of the High <ORG>, that the surcharge was not a part of the price for admission but was a payment made for the specific purpose of being applied to local charities. At page 780 of the report this <ORG> has observed thus:

"The surcharge is undoubtedly a payment which a race goer is required to make in addition to the price of admission ticket if he wants to witness the race from the Club enclosure, but on that account it does not become part of the price for add- mission. The admission to the enclosure is the occasion and not the consideration for the surcharge taken from the race goer. It is true that but for this insistence on payment of the surcharge at the time of admission to the enclosure, the race-goer might not have paid any amount for local charities. But that does not render the payment of the surcharge involuntary, because it is out of his own volition that he seeks admittance to the enclosure and if he wants such admittance, he has to pay not only the price of the admission ticket but also the surcharge for local charities. The surcharge is clearly not a part of the price for admission but it is a payment made for the specific purpose of being applied to local charities."

On parity of reasoning the 'Dharmada' amounts paid by the customers cannot be regarded as part of price or a surcharge on price of goods purchased by the customers. The amount of 'Dharmada' is undoubtedly a payment which a customer is required to pay in addition to the price of the goods which he purchases from the assessee but the purchase of the goods by the customer would be the occasion and not the consideration for the 'Dharmada' amount taken from the customer. It is true that without payment of 'Dharmada' amount the customer may not be able to purchase the goods from the assessee but that would not make the payment of 'Dharmada' amount involuntary inasmuch as it is out of his own volition that he purchases yarn and cotton from the assessee. The 'Dharmada' amount is, therefore, clearly not a part of the price, but a payment for the specific purpose of being spent on charitable purposes. The two decisions on which reliance was placed by counsel for the <ORG>, namely, <NAME> case (supra) and <NAME> case (supra) are clearly distinguishable and inapplicable to the facts of this case inasmuch,as both the decisions were rendered under sales-tax legislation where the question that was required to be considered was whether the realisations for 'Dharmam' (charitable purpose) in the former case or 'Mahimai' (religious purpose) in the latter case would fall within the definition of 'turnover' as contained in the concerned legislation and it was held that such realisations were includible in the assessee's turnover. We do not wish to express any opinion on the correctness of these decisions. Suffice it to state that these ratio of these decisions cannot apply to the instant case. Since! the realisation in question in the present case are not a part of the price or surcharge on the price but payments for the specific purpose of being spent on charitable purposes, they cannot be regarded as trading receipts of the assessee.

Dealing with the factual aspects on the basis of which counsel for the <ORG> sought to support the, <ORG>'s finding that no trust could be said to have been created by the customers it will be apparent from the above discussion that none of the aspects are such as would lend support to the inference drawn by the <ORG>. We have already dealt with the alleged compulsory nature of the levy and have pointed out that the 'Dharmada' amounts cannot be said to have been paid involuntarily by the customers and in any case the compulsory nature of the payments, if there be any, cannot impress the receipts with the character of being trading receipts. Further, it is not possible to accept the submission that the customers being illiterate did not appreciate that they were paying the amounts with a view to create a trust, especially when it has been found that such payments were made pursuant,to a custom which obtained in the commercial and trading community; indeed, being a customary levy the constituents or customers whether literate or illiterate would be knowing that the additional payment over and above ;he price were meant for being spent by the assessee for charitable purposes. Further, the fact that the assessee would be having some discretion as regards the manner in which and the time when it should spend the 'Dharmada' amounts for charitable purposes would not detract the position the assessee held qua such amounts, namely, that it was under the obligation to utilize them exclusively for charitable purposes. It is true that the assessee did not keep these amounts in a separate bank account but admittedly a separate 'Dharmada' account was maintained in the books in which every receipt was credited and payment made there out on charity was debited and <ORG> had clearly found that these amounts were never credited in the trading account nor were carried to the profit and loss statement. Having regard to this position, it seems to us clear that the <ORG>'s finding that no trust could be said to have been created by the customers in respect of the impugned amounts will have to be regarded as erroneous.

In the result, after considering both the aspects, we are of the view that the impugned realisations made by the assessee from its customers for 'Dharmada' being validly ear-marked for charity or charitable purpose could not be regarded as the assessee's income chargeable to income-tax. The ultimate. conclusion of <ORG>, is, therefore, confirmed and the appeals are dismissed with costs.

N.V.K. Appeals dismissed.