Judgment :- 1. In these two connected references made to this Court under S.256 (1) of the Income Tax Act, 1961 (hereinafter called the Act the Income Tax Appellate Tribunal, Cochin Bench-for short the Tribunal-has referred the following question of law as arising out of the common order passed by it in R. A. No. 176 (Coch) /77-78 and R. A. No. 177 (Coch)/77-78 dated 16-12-1977: " Whether, on the facts and in the circumstances of the case, the donations from a trust to which S.11 applies in cash and in the shape of shares in a limited company given with a direction that they should form corpus of the trust is to be treated for the purpose of S.11 as income of the assessee¬trust?" 2. The assessees (respondents) are two public charitable trusts to which the provisions of S.11 of the Act are admittedly applicable. The relevant assessment year is 1971-72 for which the accounting period is the financial year ending 31-3-1971. During the course of the accounting year the Trustees in each case had received as donation from a different Trust 3000 shares in a limited company and a cash donation of Rs. 5000/- subject to the stipulation made by the donor-trust and accepted by the assessee-trust that the subject-matter of the said donation should be held by the assessee-trust as corpus and only the income therefrom should be expended on charitable purposes of the assessee-trust. The said stipulation is contained in two identically worded letters dated 5-7-1970 passed to the assessee trust by the donor-trust. Annexure "A" is a copy of one of those letters. 3. The Income-tax Officer, finalised the assessment in each case by induing in the income of the assessee¬trust the cash receipt of Rs. 5000/-and the market value of the donated shares of the limited company which form the subject-matter of the donation. In doing so the Income-tax Officer took the view that the provisions of S.2-(2) of the Act were attracted to these cases and the contributions made to the assessee¬trust by the donor-trust had to be deemed to be income derived by the asseessee-trust from property by virtue of the operation of S.12 (2). 4. In doing so the Income-tax Officer took the view that the provisions of S.2-(2) of the Act were attracted to these cases and the contributions made to the assessee¬trust by the donor-trust had to be deemed to be income derived by the asseessee-trust from property by virtue of the operation of S.12 (2). 4. On appeals filed by the assessees the Appellate Assistant Commissioner upheld the contentions of the assessee that the donations in question could not be treated as income derived by the assessees in view of the specific stipulation contained in Annexure "A" that the donation was to be held as corpus in the hands of the assessees. Though the department filed appeals before the Tribunal, the Tribunal confirmed the decisions of the Appellate Assistant Commissioner and dismissed those appeals. These references have thereafter been made to this Court by the Tribunal at the instance of the department. 5. S.12 of the. Act as it stood at the relevant time (prior to the amendment introduced by the Finance Act, 1972) was in the following terms: "12(1) Any income of a trust for charitable or religions purposes or of a charitable or religious institution derived from voluntary contributions and applicable solely to charitable or religious purposes shall not be included in the total income of the trustees or the institution, as the case may be. (2) Notwithstanding anything contained in sub-section (1), where any such contributions as are referred to in sub-section (1) are made to a trust or charitable or religious institution by a trust or a charitable or religious institution to which the provisions of S.11 apply, such contributions shall, in the hands of the trust or institution receiving the contributions, be deemed to be income derived from property for the purposes of that section and the provisions of that section shall apply accordingly." In order that sub-section (2) of S.12 should get attracted to a case, a contribution of the nature referred to in sub-section (1) should have been made to the assessee-trust by another trust or charitable or religious institution to which the provisions of sub-section (1) of S.11 apply. This is clear from the use of the words "where any such contributions as are referred to in sub-section (I) are made to a trust ". Sub-section (1) refers to any Income derived from voluntary contributions and applicable solely to charitable or religious purposes. This is clear from the use of the words "where any such contributions as are referred to in sub-section (I) are made to a trust ". Sub-section (1) refers to any Income derived from voluntary contributions and applicable solely to charitable or religious purposes. Hence the contribution should be such as will constitute income in the hands of the trust by which it has been received. A contribution given and accepted with a specific stipulation that it shall be treated only as corpus of the receiving trust and not as income will not fall within the scope of sub-section (1) of S.12, and ipso facto it must follow that a voluntary contribution so made will not be taken in by the description "such contributions as are referred to in sub-section (1)" contained in sub-section (2). We find we are supported in this view by the decision of a Division Bench of the Allahabad High Court in Sri Dwarkadheesh Charitable Trust v. Income-Tax Oncer ((1975) 98 ITR. 557) wherein the learned Judges had occasion to consider most the identical point in similar circumstances The same view has also been taken by the High Court of Gujarat in Commissioner of Income-Tax v. Bal Utkarsh Society ((1979) 119 ITR. 137). We are in respectful agreement with the aforesaid decisions. The conclusion that emerges from the foregoing discussion is that the Tribunal was perfectly right in holding that the donations in question received by the assessees do not form income in the hands of the two assessee-Trusts and do not, therefore, attract the applicability of the provisions of sub-section (2) of S.12. The question referred in these two cases is accordingly answered in the negative, that is, in favour of the assessees and against the department. The parties will bear their respective costs.