1984 (3) TMI 103 - AT - Income Tax

Summary

Issues:
- Disputed amounts claimed as voluntary gifts by the assessee
- Taxability of the disputed amounts as income in the hands of the assessee
- Decision of the Appellate Tribunal ITAT BOMBAY on the appeals filed by the Revenue

Analysis:
1. The Revenue objected to the orders of the AAC deleting certain amounts added as income in the hands of the assessee by the ITO, claiming them to be voluntary gifts. The assessee provided complete details of the donors and explanations for receiving the amounts, stating they were gifts and not income.

2. The ITO disagreed with the assessee, asserting that the amounts were paid for spiritual cures or benefits received by the donors, despite being termed as gifts. He deemed these receipts as taxable income in the hands of the assessee due to the regularity of payments and perceived favors received.

3. The AAC, upon appeal by the assessee, accepted her contentions and deleted the additions. The AAC differentiated the case from precedent by emphasizing that the donations were not directly linked to benefits received, asserting they were voluntary and mainly intended for charitable activities, not taxable income.

4. The Revenue appealed to the Tribunal challenging the AAC's decision. After hearing both parties and reviewing the evidence, the Tribunal upheld the AAC's decision. They noted the spiritual services were provided free of charge by the assessee, with declarations from donors confirming the gifts were out of respect and not in exchange for services rendered.

5. The Tribunal found the donations were personal gifts expressing esteem and veneration for the assessee, not payments for services. Citing relevant case law, including decisions of the Supreme Court and Bombay High Court, the Tribunal concluded that the receipts were not taxable as income under the Income Tax Act, supporting the AAC's decision.

6. Consequently, the Tribunal dismissed the appeals, affirming that the disputed amounts were not subject to tax as they were personal gifts, not income from business, profession, or vocation. The Tribunal's decision was based on the nature of the receipts and the absence of any direct correlation between the gifts and services provided by the assessee.