# NEW DELHI v. BULI COTTON MILLS (P) LIB., HATHRAS DISTT., ALIGARH - **Citation:** [1979] 2 S.C.R. 241 - **Court:** Supreme Court of India - **Decided:** 1978-11-07 - **Bench:** P. N. Bhagwat!, V. D. TuLZAPURKAR - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/new-delhi-v-buli-cotton-mills-p-lib-hathras-distt-aligarh-7507 - **Pages:** 16 ## Headnote Indian Income Tax A.ct. 1922 s. ~(3)(i) & s. 10(1)-Assessee colleoted moneys on sale of goods und~r t.he htad "D/larmada"-Kept the amount in a separate account-Created a trust-Utilised the fnoney for charitable purposes- --.--- Whether amount realised cowld be regarded as assessee's income-"Dhannadci' C Trust whether void as Val?Ut Qnd uncertain. ; ·-'\ Words & Phrases-"D•armada"-meaning of. The assessee reali3ed certain amounts of money on account of Dharmada (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 '"Dharmada" in the bills issued to customers. Without taking them into its trading account, the assessce, credited these amounts to a separate account known as "Dhrmada" account. The Board of Directors of the company created a trust and declared that all moneys standing in the "Dharmada 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 Income Tax Officer adt'ed the lnnounts realised under the head "Dharmada" to the assessable income of the iissessce. The assessce's appeals to the Appellate Assistant Commissioner ·were dismissed. On further appeal the Appellate Tribunal held that the trust was void for vagueness and uncertainty and that the realisations par· took of the character of trade receipts. On reference, the High Court held that the amounts were never the income of the assessee, that the assossee 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 "Dharmada" was a customary levy prevailing in some parts of the country and' where it was paid by the cutomers to a trading concern, the amount was not paid ai. a price for the commodity sold to the D E F customer. G In appeal to this Court it was contended on behalf of thC Revenue that the realisations being a compulsory levy, they mast be regarded as a part of the consideration or price of the goods purchased by the buyers and that gift for • -,. .. Dharm:1da" was void for vaguenetls and uncertainty. Dismissing ti.e appeals, HELD : I. The impugned realisations made by the assessee from its customers for "Dharmada" being entirely earmarked for religious or charitable H 242 SUPREME COURT REPORTS [1979] 2 S.C.R. A purposes would not be regarded as the assessee's income chargeable to income tax. [256FJ 2. A gift to the "Dharmada" or "Dharmadaya'' both in common parlance as well as the cusotmary 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 B amounts to the assessee earmarking then1 for "Dharmada" 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 ob1igation to spend the same for charitable purposes only, with the result that these receipts could not be regarded as forming income of the assessee. c D E F G H [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 ta "Dharmada" would be definite, the object being certain viz., for religious or chartiable purposes. In common parlance the expression "Dharmada" or "Dharamadaya" cannot be said to be vague or uncertain and as such a gift to- "Dharmada" (Dharmadaya) would not be invalid for vagueness or uncertainty. [251 E·FJ 3. While the word "Dharma" is indefinite and equivocal, the word 'Dharmadaya" 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 ## Text _Characters 0–39,484 of 44,727. This is a partial read: ask again with offset=39484 for what follows._ .. 241 COMMIS.SIONER OF INCOME TAX, (CENTRAL) DELHI, A NEW DELHI v. BULI COTTON MILLS (P) LIB., HATHRAS DISTT., ALIGARH November 7, 1978 [P. N. BHAGWAT! AND V. D. TuLZAPURKAR, JJ.] Indian Income Tax A.ct. 1922 s. ~(3)(i) & s. 10(1)-Assessee colleoted moneys on sale of goods und~r t.he htad "D/larmada"-Kept the amount in a separate account-Created a trust-Utilised the fnoney for charitable purposes- --.--- Whether amount realised cowld be regarded as assessee's income-"Dhannadci' C Trust whether void as Val?Ut Qnd uncertain. ; ·-'\ Words & Phrases-"D•armada"-meaning of. The assessee reali3ed certain amounts of money on account of Dharmada (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 '"Dharmada" in the bills issued to customers. Without taking them into its trading account, the assessce, credited these amounts to a separate account known as "Dhrmada" account. The Board of Directors of the company created a trust and declared that all moneys standing in the "Dharmada 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 Income Tax Officer adt'ed the lnnounts realised under the head "Dharmada" to the assessable income of the iissessce. The assessce's appeals to the Appellate Assistant Commissioner ·were dismissed. On further appeal the Appellate Tribunal held that the trust was void for vagueness and uncertainty and that the realisations par· took of the character of trade receipts. On reference, the High Court held that the amounts were never the income of the assessee, that the assossee 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 "Dharmada" was a customary levy prevailing in some parts of the country and' where it was paid by the cutomers to a trading concern, the amount was not paid ai. a price for the commodity sold to the D E F customer. G In appeal to this Court it was contended on behalf of thC Revenue that the realisations being a compulsory levy, they mast be regarded as a part of the consideration or price of the goods purchased by the buyers and that gift for • -,. .. Dharm:1da" was void for vaguenetls and uncertainty. Dismissing ti.e appeals, HELD : I. The impugned realisations made by the assessee from its customers for "Dharmada" being entirely earmarked for religious or charitable H 242 SUPREME COURT REPORTS [1979] 2 S.C.R. A purposes would not be regarded as the assessee's income chargeable to income tax. [256FJ 2. A gift to the "Dharmada" or "Dharmadaya'' both in common parlance as well as the cusotmary 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 B amounts to the assessee earmarking then1 for "Dharmada" 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 ob1igation to spend the same for charitable purposes only, with the result that these receipts could not be regarded as forming income of the assessee. c D E F G H [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 ta "Dharmada" would be definite, the object being certain viz., for religious or chartiable purposes. In common parlance the expression "Dharmada" or "Dharamadaya" cannot be said to be vague or uncertain and as such a gift to- "Dharmada" (Dharmadaya) would not be invalid for vagueness or uncertainty. [251 E·FJ 3. While the word "Dharma" is indefinite and equivocal, the word 'Dharmadaya" 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 "Dbarmarth" has only one meaning viz., anything given for charitable or pious purposes. [251C·DJ 4. Apart from the fact that the concept of: "Dharmada" or "Dharmadaya" 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 "Dharmada" is by custom invariably regarded a gift to charitable purposes. [252C) 5. Since a gift or payment for "Dharmada" 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 utilised. [253E] 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. [2550) 7. The amount of "Dharmada" 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 "Dharmada" amount taken from the customer. Although without payment of "Dharmada" amount the customer may not be able to purch.ase the goods, but that would not make the payment of "Dharmada" involuntary inasmuch as' it is out of his own volition that he purcltases the goods from the trader. The "Dharmada" amount is, therefore, not a part of the price but a payment for the specific purpose of being spent on charitable purposes. [255C·E] ... ----..- t-· •• • • • ' --.--- C.I.T. v. BIJLI COTTON MILLS (Tulzapurkar, I.) 243 8. Even if the assessee had not kept these amounts in a separate bank account, A admittedly a separate "Dharmada Account" was maintained in the books of the assessee in which every receipt was credited and payment made out on charity ""as debited. The High Court had clearly, found that all these amounts were never credited in trading account nor carried over to profit and loss statement. [256E] Commissioner of Income-tax, West Bengal v. Tollygunge Club Ltd., [1977] B 107 !TR 776; followed . Agra Bullion Exchange Ltd. v. Commissioner of Income Tax, [19611 41 ITR 473, Ranchordas v. Parvatibai, 26 IA 71; Devshankar v. Moti Ram, ILR 18 Born 136; Thakur Das Shyam Sunder v. Additional Commissioner of Income-tax, U.P. & Anr., [1974] 93 ITR 27; Commissioner of Income-tax, Amritsar v. Gheru Lal Bal Chand, 111 !TR 134, Advocate General of Bombay v. Jimbabai, !LR 41 C Born. 181; Chaturbhuj Vallabhdas v. Commissioner of Income-tax, 14 ITR 144 referred to. Poosarla Sambamurthi v. State of Andhra, 7 STC 652; N. S. Pandaria Pillai v. State of Madras, 31 STC 108 distinguished. Prof. Wilson's Glossary of Judicial and Revenue Terms: Molesworth's Dic 4 D tionary (Marathi-English) Second Edition (1975) referred to. ClvlL 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 the Allahabad High Court in Income Tax-Reference Nos. 320/64 and 454 E of 1965). T. A. Ramachandran and A. Subha~ini for the· appellant. "-,, C. S. Agarwal, R. A. Gupta, S. K. Jain and K. C. Dua for the respondent in CA 2059 /71. C. S. Agarwal, R. A. Gupta, S. K. Jain, G. S. Chatterjee and F K. C. Dua for the respondent in CA 1328-1329/73. The Judgment of the Court wa·s delivered by TULZAPURKAR, J .-These three appeals are preferred on certificates of fitness granted by the Allahabad High Court under ss. 66-A of the Indian Income Tax Act, 1922. They raise a common question whether G the amounts realised by the assessee-company from its customers as and for '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 havin!l been incorporated H in the year 1943. It carries on the business of manufacturing and selling yarn. Right from the inception it used to realise certain amounts A B c D E F G H 244 SUPREME COURT RHORTS [1979] 2 S.C.R. on account of 'Dhannada' (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 t!ie 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 Accounf' 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 the Board of Directors of the as·sessee-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 Lala Nawal Kishore and Lala Ram Babula!, 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, 011 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 utilis~d by them for altruistic, religious or charitable purposes. During the previous year (.be,ing the calendar year 1950) relevant to the asses•ment year 1951-52, the total amount received by the assessee-company in the "Dharmada 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 'Dharmada' 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 a·sie.sment year 1953-54 the assessee received a sum of Rs. 19,490/- as 'Dhannada' from its customers and a sum of Rs. 4578/- was also credited on account of interest in the "Dharmada Account". l• the assessment proceedings for the assessment years 1951-52, 195253 and 1953-54 the assessee claimed that the aforesaid amounts lying to the credit of the "Dharmada Account" were held in trust by it and were ear-marked for charity and as such they were not ifs income from business liable to tax and in support of this contention reliance was ' • • • • •• C.I.T. v. BIJL! COTTON MILLS (Tulzapurkar, J.) 245 placed upou the resolution passed by the Board of Directors on January A 15, 1945 and the Deed of, Declaration of Trust dated October 3, 1950. The Income-Tax Officer rejected the contention and added the said amounts to the assessable income of the assessee-company in all the years. The appeals before the Appellate Assistant Conunissioner at the instance of the assessee-company proved unsuccessful. Further appeals to the Appellate Tribunal also proved futile. Before the TriB bunal it was contended on behalf of the assessee that each customer who paid the 'Dharmada' amount was a settlor of the trust, that there were as many settlors as there were customers and that the assessee had received these amounts under an obligation to utilise the same for charity; it was pointed out that the resolution of the Board of Directors C dated January 15, 1945 was merely a confirmation of the fact that the amounts l'!ere held in trust by the assessee and that the deed dated Octa~ ber 3, 1950 was merely a declaration of the acceptance of the trust by the two trustees mentioned therein; in other words, it was contended ·that the customers of the assessee created a trust by paying the amounis as 'Dharmada' and the amounts having been ear-marked for charitable D purposes only they were not the assessee"s income. liable to tax. The Tribnnal negatived the claim of the assessee on two grounds, first, that the amcunts in question could not be regarded as having been received or held by the asses·see under a trust for charitable pwposes, the trust being void for vagueness and uncertainty and, secondly,. that the realisations partook of the character of trading receipts. At the instance of E the assessee the matter was carried to the. High Court by way of two References, Income-tax Reference No. 329 /1964 being in relation tq the amount,,; concerned in the two assessment years 1951-52 and 195253 and Income-tax Reference No. 454/1965 being in relation to the amount concerned in the assessment year 1953-54. In the former Reference the High Court approached the question not from the angle of F deciding whether the assessee could claim exemption from tax under s. 4(3) (i) of the Act in respect of the impugned amounts but whether the impugned amount' could be regarded as the profits or gains of the busine.. caITied on by the assessee under s. 10(1) of the Act; in othec words, in the opinion of the High Court the dispute related to the initial G character of the receipt itself and the que1tion was whether the amounls paid by the ·customera ear-marked for charity were the assessee's income at all and following an earlier decision of a Division Bench of that vei;y Court in tho case of Agra Bullion Exchange Ltd. v. Commissio_. of Income Tax,(1) the High Court held that the impugned amonnt. were never the income of the assessee at all and that the asaesseo was merely u acting as a conduit pipe or clearing house tor passing on the amounts (I) (1961) 41 l.T.R. 472. A B c D F G II 246 SUPREME COURT REPORTS [ 1979] 2 S.C.R. to the objects of charity. It took the view that the Tribunal 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. The High Court pointed out that the amounts realised by tha assessee on account of 'Dharmada' were never treated as trading receipts or as a surcharg;o on the sale price which was evident from the fact that such realisations were never credited to the 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 tpaid 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 the High Court answered the questions in favour of the assessee and against the Revenue. Following this decision, the High Court 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 the High Court before us in these appeals. Counsel for the Revenue 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 cu·stomers 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 the Andhra Pradesh High Court in Poosa.rla Sambamurthi v. State of Andhra,(') and the other of Madras High Court in N. S. Pandaria Pillai v. The State of Madras,(') where similar amounts charged by the assessee as and by way of 'Dharmam' in the former case and 'Mahimai' in the latter case wi:.re 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. ' • •• • ' , C.l.T. v. BJJLI COTTON MILLS (Tulzapurkar, J.) 2 47 'Dharma' and 'Dharmada' in Prof. Wilson's Glossary of Judicial & A Revenue Terms, the decision of the Privy Council in Ranchordas v. Parvatibai(il) and the decision of the Bombay High Court in Devshankar v. Moti Ram.(') Apart from this legal position he sought to support the Tribunal's finding that no trust could be said to have been created by the cu'stomers on the basis of certain factual aspects-(a) the cusB tomers [paid the amounts not voluntarily but out of compulsion, (b) the customer~ 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 'Dharmada' and ( d) the assessee did not keep these amounts in a separate bank account-separate from its business assets. c He therefore, urged that no trust of th.ese realist1tions could be said to have been created and a's such these realisations were rightly regarded by the. Tribunal as part of the assessee's trading receipts liable to be induded 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 [) E the price for the goods purchased from the assessee, were paid for 'Dharmada' (i.e. for charity) and were received by the assessec 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 F reliance was placed by him upon Full Bench decision of the Allahabad High Court in Thakur Das Shyam Sunder v. Additional Commissioner of Income-Tax, U.P. and Another(') and the decision of the Punjab & Haryana High Court in Commissioner of Income-tax, Armit>ar, v. Gheru Lal Bal Chand('), where such customary meaning of 'Dharmada: among the trading community has been judicially recognised. He further urged that the compuisory 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, (l) 26 I.A. 71. (2) I.LR. lg Born. 136. (3) (1974) 93!. T.R. 27. (4) 1111.T.R. 134. G H A B c 248 SUPREME COURT REPORTS [1979) 2 S.C.R. not being any part of the ]>rice nor even a snrcharge on the pric~. In support of his contentions counsel strongly relied upon the decision of this Court in Commissioner of Income-Tax, West Bengal v. Tollygunge Club Ltd.(.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 fo1 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 a·spect is what is the true nature or charact@r of 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 the~e 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 or obligation to spend the same only on charitable objects ? But in the D facts ;ond 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. Jn other words,. if the legal obligation to spend the same for charitable purposes is void and, therefore, non-existent the receipts E F G H 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 the High Conrt to determine the question at issue cannot be regarded as correct. As pointed out carli.,r, the High Court approached the question from the angle of deciding whether the impugned amounts realised by the asse.see could be regarded as the Profits and gains of the busine.s carried on by the assessee under s. 10(1) of the Act, impliedly suggesting that a claim for exemption for such amounts under s. 4(3) (i) o[ 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 Agra Bullion Exchange 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 the High Court assumed that the customers while paying these amounts had validly ear-marked them for charity. Since the Revenue had specifically raised a dispute that the receipts of 'Dharmada wonld neither create a valid trust nor a valid legal obligation to spend the same for charitab1e purposes, 'Dharmada' being a vagne and uncertain concept, the High Court could not, in our (I) (1977) 107 I.T.R. 776. .. • ~ .. • t ii r I ;: 1~- I • ., " ' . • ( ~ • • • - -i i • • ~ -.. C.I.T. v. BIJLI COTTON MILLS (Tulzapurkar, !.) 2 49 view, come to the finding that these realisations were not trading receipts unless it further found that ear-marking for 'Dharmada' 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 que·stion that arises for our consideration is whether a gift to 'Dharmada' is void on grounds of vagueness or uncertainty? The answer to this question will depend u;pon 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 conc.:p s of 'Dharma and Dharmada' will have to be considered together. It is true that as early a·s in 1899 the Privy Council in Runchordas Vandrawai1das and Others v. Parvatibhai a'1d 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 the Privy Council relied npon the meaning of that expression given in Prof. Wilson's Glossary of Judicial and Revenue Terms, where the expression is stated to aean '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', the Privy Council observed thus : "In Wilson's Dictionary "Dharam" is defined to be law, A B c D virtue, legal or moral duty ....... The objects which can be E considered to be meant by that word are too vagua and unce,rtain for the administration of them to be under any control." By this decision the Privy Conncil gave its impramatur to the view which prevailed in the Presidencies of Bombay and Calcutta for the. past 5() years that gifts to 'Dharma' simo:>liciter were invalid. The reason for the decision was the oft-quoted principle that all charities were the 'pecial care and under the direct control of the Court of Equity and that the Court must refuse to accept as "chari!y" any gift which by reason of the vagueness in which it was expressed left the Court in doubt as to how it was to be applied. However, in a later Bombay case, namely, the Advocate-General of Bombay v. Jimbabai.(1) Beaman, J., felt that in this country 'Dharma' did mean roughly and almoot invariably in the cases which had come up for legal decisions ju•t "charity" and no'hing 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 ot Hindll8 and (!) l.L.R. 41 Born. 181. 17-817 SC!/78 F G H A B c D E F G H 250 SUPREME L'OU..T REPORTS [1979] 2 S.C.R. Mahomedans; but a liberal nse of the convenient doctrine of cy-pres 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 oi 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 Govermuent of India Act, 1935, which was a Provincial subject. Thereafter the State of Bombay enacted Bombay Public Trust Act being Act No. XXIX of 1950 which is now in operation in the States of Maharashtra and Gujarat. By the Explanation to s. 10 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 rn 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 Chaturbhuj Vallabhadas v. Commissioner of Income-Tax(') the Bombay High Court has taken the view that where instead of 'Dharma' the testator used the English word 'Charity' that word without any qualifications o_r limitations denoted public charity and as such the bequest was held to be a valid charitable bequest falling within the definition of "charitable purposes" ins. 4(3)(i) of the Act. Torning 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. Wilson's Glossary the expression 'Dharmada' or 'Dharmadaya' is stated to be the vernacular equivalent of the Sanskrit expression 'Dharmadan' or 'Dharmadayam' and the expression 'Dharmada' is explained thus : "Dharmadeo, corruptly, Dharmadow, (from Dan or Daya, donation) An endowment, grant of food, or lands, or fnnds, for religious or charitable purposes". (1) 14 J.T.R. 144.. • • .. ,.. ' • • ( • I ' C.l.T. v. BIJLI COTTON MILLS (Tulzapurkar, J.) 2 51 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 charilable 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 exprc·ssion '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 'Dharma- <;iaya' cannot be said to be vague or uncertain and as such a gift to 'Dnarmada' (Dharmadaya) would not be invalid for vagueness or uncertainty. Counsel for the Revenue,, however, strongly relied upon the decision of the Bombay High Court in Devshankar v. Moti Ram (supra) where that Court 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 Court, it appears to us clear that the Court 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 Court 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 mentioued in Prof. Wilson's Glossary and Molesworth's Dictionary, an endowment or gift for religious or charitable purposes and we are inclined A B c D E F G H A c D E F G 252 SUPREME COURT REPORTS (1979] 2 S.C.R. to accept the latter popular meaning that ,Js 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 tradin!~ or commercial community in various parts of this country a gift or payment for 'Dharmada' is by custom invariably regarded as a gift to charitable purposes. In Thakur Das Shyam Sunder v. Additional Commissioner of Income-Tax U.P. and Another (supra), a Full Bench decision of 1he Allahabad High Court, the question was whether, when the asstssee, 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 iJlaise from the oerson whose goods were sold as 'Dharmada' and credited the amounts thus collecteu in a separate 'Dharmada' account which was held by him, l