LexDR. K. GEORGE THOMAS versus THE C. I. T. KERALA, ERNAKULAM
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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936
DR. K. GEORGE THOMAS
v.
THE C. I. T. KERALA, ERNAKllLAM
SEPTEMBER 23, 1985
[V.D. TULZAPURKAR AND SABYASACHI MUKllARJI, JJ.]
Indian Income Tax Act, 1922 -
S.4(3)(vii) - Receipts -
Casual or non-recurring in nature - Arising out of an avoo.ation -
Whether income exigible to tax -
Link between activities of
assessee and payments received - Relevancy ofa
The assessee-appellant had associated himself with the
India Gc;>gpel Mission while he was get ting his education in the
United States of America during 1953 to 1957 and was propagating
the ideals of Indian Christian Crusade, U.S.A., an institution
sponsoring religious education in IndJa, The India Gospel Mission
wns collecting money for its working abroad through the Indian
Christian Crusade. On returing to India in January 1957 he
started publishing a religious magazine called "Viswa Deepatn" and
iu 1959 started publishing Malyalam daily newspaper called
"Kerala Dhwani", In the assessment year 196o-6l he filed a return
disclosing a loss of Rs.1,59,894
under the head 'husiness'.
While scrutinising the accounts, the Income Tax Office found
amounts totalling Rs.2,90,220 credited
in
the
assesaee's
accounts. Since the names and other details of persons who had
donated the amounts were no: available it had to be presumed that
the amounts had been given to the assessee by the Indian
Christian Crusade, U.S.A. lilld, therefore, the Income Tax Officer
rejected the contention of the assessee that the amounts received
by
him were
purely personal gifts and testimonial• made
voluntarily and held that the so called donations were payments
by way of remuneration for the work done by the assessee in
connection wlth the spreading in India, of the ideals of the
Indian Christian Crusade, U.S.A. and that these amounts were
connected with the business of the assessee and were liable to be
taxed as his business income. He, therefore, brought to tax
Rs.2,90,220 which had been received during the assessment year
196o-61.
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For the &ssessment year 1961-62 the assessee had received
similar amounts totalling to Rs. 3, 63, 7 50 through the Indian
Christian Crusade, U.S.A. and Income Tax Officer treated this .('
~unt also as business income and brought the same to tax.
K.G.THOMAS v. c.r.T.,KERALA
937
The assessee filed appeals and the Appellate Assistant
Coumissioner while diSlllissing the appeals held that the assessee
Was a journalist and it was his avocation or vocation to
propagate Christian ideas and ideals and that the assessee during
the stay in U.l>•A· and after his return was engaged in a movement
for the spread of religion and for fighting the forces of
atheiS111.
In further appeal, the tribunal held that the amounts did
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not represent remuneration or· payments for services rendered, and
that the receipts were clearly casual and non-recurring and did
not arise in the course of the exercise of any vocation.
The Tribonal referred the matter to the High Court, which
held that the receipts of casual and non-recurring nature would
not be included in the total income of a person. But if there was
receipts arising from the exercise of a vocation, these would be
included in the total income, even if these were of a casual or
non-recurring nature or voluntary and the receipts resulting from
such payments would be outside section 4(3)(vii) of the Income
• Tax Act, 1922. Since there was link between the activity of the
assessee and the payments and the same were made by those who
helcl similar viewa and who were interested in the propagation and
the acceptance of those views
by the general public, the
receipts, therefore, arose from the exercise of an occupation by
the assessee.
DiSlllissing the Appeals,
lll!LD: 1. The receipts by the assessee arose out of the
avocation of the assessee of propagating viewa against atheism
and preaching Christian Gospel. (947 HJ .
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2. There was a link between the activities of the assessee
and the payments received by him and the link was close-enough.
[948 A)
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St:rong & Company. of llallley Lild.ted V• Voodif:leld (Soneyor
G
of Toea), 1906 A.c. 448 and l'be "-1ss:loner of Inland Bevenue
v. E.c. Warnes & Co. Ltd., (1919) 12 r.c. 227, referred to.
3. Section 4(3)(vii) of the Indian Income Tax Act 1922
makes it clear that in order to be entitle! to the exemption, the
receipts must be of income character first. if a sum of money isExcerpt shown. Read the full judgment & AI analysis in Lexace.