K. GEORGE THOMAS versus COMMISSIONER OF INCOME- TAX, KERALA

Citation: [1986] 2 S.C.R. 874 · Decided: 30-04-1986 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

Judgment (excerpt)

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874 
K. GEORGE TH<MAS 
v. 
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C<HflSSIONER OF INCOME-TAX, KERAIA 
APRIL 30, 1986 
(R. S. PATHAK AND SABYASACHI MUKHARJI, JJ.] 
lncrime Tax Act, 1961, s. 10(3)/lncnme Tax Act, 1922 s. 
4(3) (vii) -
~usin~ss incnme - Rec 0 ipts from abroad - Whetherf 
of casual or 
non-recurrin~ nature -
Whether asc;essable as 
business income. 
The appellant is assessed to income tax in the status of 
an individual. He runs a printing press and a daily language . I 
newspaper. For the year 1962-63, he filed a return of income ~ 
showing a loss. The Income-tax Officer discovered that varioust 
remittances from abroad had been received by the assessee as 
Vice-President of the India Gospel Mission. On an enquiry he 
found that a major part of the funds credited to the account 
maintained by the assessee in the name of the Mission had been 
turned over to the newspaper and a sizeable part of it had 
been utilised for his household expenses. He rejected the 
claim of the assessee that the newspaper had been taken over 
oy the Mission or that the drawings from the account, on which~.
no interest had been charged, constituted loans taken by him 
in his individual capacity to be repaid in subsequent years, 
and being of the view that the remittances had been made to 
the assessee entirely because of his business and personal 
activities and that the funds of the Mission and the newspaper 
had all been mixed up and treated together as one unit, and Y 
the assessee had been operating upon all these funds as the 
individual owner of both the newspaper and the funds, held 
that the entire receipts of cash from abroad were relatable to~ 
the business activities of the assessee and were assessable to 
tax as his income. 
The 
Appellate 
Assistant 
Coumissioner 
allowing 
thil.,, 
assessee's appeal observed that the amounts withdrawn from th~ 
funds were merely loans repayable by the assessee to the ·· 
Mission, without however recording any definite finding on+. 
that question or as to whether the remittances constituted 
income of the assessee. 
K. GEORGE THOMA.S v, C. I. T. 
875 
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The Appellate Tribunal confirmed this order in appeal by 
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the Revenue holding that the receipts did not constitute 
income of the assessee. 
The High Court, following its decision in C.I.T. v. Dr. 
K. George Thomas, [1974] 94 I.T.R., 11, answered the Reference 
in favour of the Revenue and against the assessee holding that 
the amount was assessable as the income of the assessee. 
B 
Similar questions were raised in Appeal Nos. 2918 and 
2919 of 1977 in respect of the assessment years 1963-64 and 
1964-65 respectively, and Appeal No. 2917 of 1977 assailed the 
legality and correctness of the levy of penalty for not having 
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submitted a return for the assessment year 1962-63, but no 
separate submissions were made in those appeals. 
Dismissing the appeals by certificate, the Court, 
HEID: 1. The receipts cannot be regarded as of casual 
and non-recurring nature not arising from the assessee's 
business or the .exercise of his profession or occupation 
within the meaning of s. 10(3) of the Income Tax Act, 1961 for 
the reasons set forth in Dr. K. George ThOES v. C.I.T. 
Kerala, [1985] 156 I.T.R. 412 and are assessable to tax as the 
assessee's income. [879 G-H] 
P. Krishna Menon v. Comissioner of Incnme-tax, [1959] 
35 I.T.R. 48, referred to. 
The distinction sought to be drawn between the case for 
the assessment year 1960-61 and 1961-62 and the case for the 
assessment year 1962-63 on the factum that in the former the 
remittances were entered in the personal name of the assessee 
while in the latter the remittances have been shown in a 
separate account standing in the name of the India Gospel 
Mission is wholly without substance. [879 D-E] 
In the instant case, the assessee had treated both the 
accounts as his personal accounts from which heavy drawings 
were made from time to time entirely for his personal 
objectives. The drawings from the account: in the name of the 
Mission did not constitute loans. The assessee had treated 
that account as an intimate part of his personal funds. 
[879 E-G) 
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876 
SUPREME COURT REPORTS 
[1986] 2 s.c.R. 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos, 2916 ~ 
of 1977. 
From the Judgment and Order dated 3.2.1977 of the Kerala 
High Court in I.T.R. Case Nos. 22 to 25 of 1975. 
Devi 
Pal, 
Ms. 
A.K. 
Verma 
and 
Sukumaran 
for 
the 
Appellant. 
K.C. Dua an

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