INCOME TAX ACT, 1961

Section 4

Income - Chargeability - Amount collected from various Co-operative Societies towards education and training of members and employees -

Assessee, Federation for all Co-operative Societies formed and registered under Karnataka Co-operative Societies Act, 1959 collected amounts from various co-operative societies towards education and training as per the requirement of provisions of Karnataka Co-operative Societies Act, 1959. AO considered the same as assessee's income. Assessee contended that amount collected by assessee only because of its statutory requirement and, therefore, amount collected for co-operative education fund could not be considered as income of assessee. Held: Assessee has no control over the fund collected and it had to be administered and utilized as per rule 20 of the Karnataka Co-operative Societies Act, 1959. For the purpose of imparting education to members, directors and members of co-operative societies and general public and training to employees of co-operative societies. Thus, funds received by the assessee were for specific purpose and assessee was acting as an independent trustee for the same as per provisions of section 57A read with section 57(2A) of Karnataka Societies Act, 1959 and therefore, it could not be treated as normal income of assessee.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14, 2014-15 & 2015-16

INCOME TAX ACT, 1961

Section 80P(2)(d)

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