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2. The second point in dispute is the tax treatment of a sum of Rs. 16 lakhs, being part of the contributions made by the assessee-trust to two other trusts. Here I find, perhaps a different view from that taken by my learned brother is worth examining. I need hardly add that I have gone through the order of my learned brother with care and stand considerably benefited by such perusal.

3. The facts are not too involved. The assessee-trust was registered under the Societies Registration Act, 1860, on 30-9-1976. The objects of the assessee-trust are charitable in terms of Section 2(75) of the Act and there is no dispute on this.

It may be stated that the donee-trusts have to utilise the funds and income therefrom only for charitable purposes. In this connection kindly refer to Clauses 7 and 5 of the trust deeds of Bhartiya Kala Kendra Trust and Indian National Theatre Trust, respectively. As per the above clauses, the funds contribute by our foundation have necessarily to be applied by the trusts towards their objects, which are charitable in nature.
From the above discussion it is apparent that the income of our foundation, to the extent of contributions made by our foundation to the two trusts mentioned above, has been applied to charitable objects as per the requirement of Section 11 of the Act.
6. Section 12 deals with donee trusts and is not helpful in resolving the dispute concerning a donor-trust as in this case. Any contribution made by the donor trust to another charitable trust having similar objects, whether for meeting its day-to-day expenses or for investment in capital assets has to be looked upon as income applied for charitable purposes of donor trust, within the meaning of Section 11.
7. For the assessment year 1974-75 also, there was a similar situation. The assessee had made a contribution of Rs. 9,50,000 to the corpus of Bhartiya Kala Kendra Trust. The only difference in that year was, the contribution was made out of the corpus of the assessee-trust. The assessee contended for the year even this contribution was expenditure incurred in furtherance of the objects of the assessee. The ITO accepted this claim for that year.

The language of the sections quoted above is clear as to its contents. Section 12 provides that voluntary contributions received by a trust with a specific direction that they shall form part of the corpus of the trust will not be treated as deemed income of the trust. The other purpose of Section 12 is not relevant so far as the assessee's case is concerned. In other words, the donation of Rs 24 lakhs received by the assessee-trust from DCM being, admittedly, towards its corpus cannot be treated as its income. The next question that arises for consideration is whether the donations made by the assessee-trust of Rs. 12 lakhs each to the donee trusts out of which Rs. 8 lakhs each is towards the corpus of the respective trusts is or can be said to be application of the assessee-trust's income for charitable purposes. In this context, it is pertinent to mention that there is no dispute that the assessee is a public charitable trust, that the objects of the assessee-trust provide for giving of donations to trusts with similar objects and that the donations have been given by the assessee in furtherance of its aforesaid objects. Once there is no dispute about these three aspects, it is difficult to comprehend the arguments advanced on behalf of the department that merely because a part of the donation is towards the corpus of the donee trusts, it should not be treated as application of income. In my opinion, the learned Accountant Member is right in holding that Section 12 has no bearing whatsoever on the interpretation of the expression 'application of income' as used in Section 11(1)(a).