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Issues Involved:
1. Nature of the assessee's activities and whether they produce taxable income. 2. Whether the foreign remittances received by the assessee constitute his income. 3. The correctness of the Income Tax Officer's (ITO) assessment of the assessee's income. 4. The Tribunal's decision to set aside the assessments made by the ITO. Issue-Wise Detailed Analysis: 1. Nature of the Assessee's Activities and Whether They Produce Taxable Income: The court first examined the nature of the assessee's activities to determine if they produce taxable income. The assessee, a self-employed social worker, received funds from foreign missionaries for his social work, which included running orphanages, Bible classes, and Sunday schools. The court noted that income-tax law does not provide a complete definition of income or its sources, as these categories are never closed. The court referenced various professions and activities, including social work, and concluded that any human pursuit involving the seeking after emoluments or unrestricted inflow of money into private hands tends to make the individual an income-earner and an income-tax payer. The court emphasized that social work, like any other profession, can generate taxable income if it involves the receipt of funds for the individual's use. 2. Whether the Foreign Remittances Received by the Assessee Constitute His Income: The court addressed the Tribunal's observation that the foreign remittances were intended for charitable purposes and not for the assessee's personal use. However, the court found that the assessee's appropriation of funds for his own and his family's needs could be regarded as constructive receipt of money as income or income accruing to him in the course of his vocation as a social worker. The court rejected the notion that income must be visibly received to be taxable, stating that income can accrue visibly or invisibly. The court concluded that the foreign remittances, to the extent they were used for the assessee's personal needs, constituted his taxable income. 3. The Correctness of the Income Tax Officer's (ITO) Assessment of the Assessee's Income: The ITO had estimated the assessee's income based on his lifestyle and expenditures, including the maintenance of his family and the construction of buildings. The court found that the ITO's assessment was reasonable, given the evidence of the assessee's standard of living and the funds available to him. The court noted that the assessee had no other source of income and had appropriated funds from the foreign remittances for his personal use. The court agreed with the ITO's assessment that the benefits enjoyed by the assessee from the foreign funds could be estimated and treated as his income. 4. The Tribunal's Decision to Set Aside the Assessments Made by the ITO: The Tribunal had set aside the ITO's assessments, concluding that the foreign remittances did not constitute the assessee's income. The court disagreed with the Tribunal's decision, finding that the Tribunal had erred in its analysis. The court emphasized that the assessee's social work was a self-employed occupation that generated taxable income, and the foreign remittances used for personal needs should be considered as such. The court concluded that the Tribunal should have examined the details of the ITO's assessments more thoroughly and upheld the ITO's findings. Conclusion: The court reframed the questions of law to address the core issue of whether the Tribunal was right in setting aside the assessments for the assessment years 1969-70 and 1970-71. The court answered the question in the negative and against the assessee, necessitating that the Tribunal re-examine the merits of each heading under which the ITO had computed the assessee's taxable income. The references were disposed of accordingly, with no order as to costs.
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