1986 (4) TMI 1 - SC - Income Tax

Amounts received by the assessee as an office bearer of religious faith - since the assessee has used the same for his personal use and for his business, it is taxable - It is also not to be treated as casual income - Whether the Tribunal was right in finding that the amount of Rs. 5,85,637 are receipts of a casual and non-recurring nature not arising from business or the exercise of a profession or occupation within the meaning of section 10(3) - Held, no

Summary

Issues:
Assessment of income received from abroad, nature of receipts as income, levy of penalty for non-submission of return.

Analysis:
The judgment delivered by the Supreme Court pertains to appeals against the Kerala High Court's decision regarding the assessment of income-tax for the appellant, an individual running a printing press and a newspaper. The appellant filed a return showing a loss for the assessment year 1962-63. The Income-tax Officer found that remittances from the USA were received by the appellant in his capacity as Vice-President of the India Gospel Mission, which were then utilized for personal and business expenses, including running the newspaper and purchasing properties. The Income-tax Officer concluded that the funds received were assessable as the appellant's income and not loans as claimed by the appellant. The Appellate Assistant Commissioner did not give a definite finding on the nature of the funds. The Income-tax Appellate Tribunal, based on an earlier order, held that the receipts were not taxable. However, the High Court held that the funds were assessable as the appellant's income for the assessment year 1962-63 and were not of a casual and non-recurring nature.

The High Court's decision was based on the overwhelming evidence showing that the appellant treated the funds as his personal accounts, making heavy withdrawals for personal use. The distinction between the present case and earlier cases regarding the nature of remittances was deemed unsubstantial. The High Court's decision was supported by the evidence on record, indicating that the funds were an integral part of the appellant's personal finances. The Supreme Court upheld the High Court's decision, emphasizing that the funds were assessable as the appellant's income and not of a casual nature, in line with the Income-tax Act, 1961. The court referred to a previous judgment supporting this conclusion and dismissed the appeal.

Additionally, the judgment addressed the issue of the levy of penalties on the appellant for not submitting returns for subsequent assessment years. The appeals challenging the penalty levy were also dismissed by the Supreme Court. The judgment highlighted the failure of the appellant to provide separate submissions on these penalty issues, leading to the dismissal of the appeals with costs.