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TMI Blog1977 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... on presented under section 256(1) of the Income-tax Act, 1961, the Commissioner of Income-tax, Kerala, Ernakulam, requires the Tribunal to refer to the High Court of Kerala certain questions of law arising out of the order of the Tribunal in I.T.A. No. 148/(Coch)/72-73, which was an appeal preferred by the Income-tax Officer and which was dismissed by the Tribunal and to which order, one of us, the Judicial Member, was a party. Inasmuch as, in our opinion, certain questions of law do arise out of the aforesaid order, we are hereby drawing up a statement of the case. 2. The statement of the case relates to assessment year 1962-63. The assessee is individual in status. He runs a printing press known as " Kerala Dwani " and also a Malayalam Daily newspaper of the same name. The assessee filed a return of income declaring a loss of Rs. 3,37,183. As per the account maintained by the assessee, according to the Income-tax Officer, in his alleged capacity as the vice-President of the India Gospel Mission, there were various remittances from the United States of America credited in that account, which receipts amounted in this year to Rs. 5,85,637. The assessee had two bank accounts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttances that came to the assessee are entirely connected with his business activities and have been entirely utilised for the business and personal activities of the assessee. He inferred that the entire receipts of cash from the U.S.A. is relatable to the business activities of the assessee and is assessable to tax as the assessee's income. So he came to the conclusion that the assessee is only trying to explain away the utilisation of funds for his own purposes as loans taken in his personal capacity from his own self as the vice-president of the India Gospel Mission. Following the judgment of the Supreme Court in the case in P. Krishna Menon v. Commissioner of Income-tax [1959] 35 ITR 48 (SC), he brought the amount of Rs. 5,85,637 shown as received from India Gospel Mission as per the ledger maintained by the assessee in the name of India Gospel Mission to tax as income of the assessee. A copy of the assessment order is hereto annexed, marked annexure "A", and forms part of the statement of the case. 3. In appeal, the Appellate Assistant Commissioner stated that the case of the assessee was that these remittances from abroad were by various donors in the U.S.A, through an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the receipts of similar amounts in the prior two assessment years. The Tribunal rejected all these arguments and found, following the Tribunal's order for assessment years 1960-61 and 1961-62, that the receipts from abroad, even assuming that these are received by the assessee in the manner found by the Income-tax Officer, are not the income of the assessee and that if it is income those are receipts of a casual and non-recurring nature not arising from business or the exercise of a profession or occupation. In that manner, the Tribunal upheld the order of the Appellate Assistant Commissioner. 5. Incidentally, it may be stated that when at the instance of the Commissioner of Income-tax, Kerala, appropriate questions about the income nature and the eligibility for exemption under section 4(3)(vii) of the Indian Income-tax Act, 1922, the amounts being receipts of casual and non-recurring nature not arising from business or the exercise of a profession or occupation, were referred to the Kerala High Court, that court, subsequent to the decision of the Tribunal for this assessment year 1962-63, by their judgment in I.T.R. Nos. 32 33 of 1971 on the file of the High Court dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the test followed by the Tribunal on the earlier occasions had to be followed for the assessment year in question also. It was of the view that so long as the receipt of the amount depended on the good wishes of the donors in America it was receipt of a non-recurring nature even though the assessee might have received the amounts on various occasions. Therefore, following the order of the Tribunal for two prior assessment years it found that the remittances so received were not proved to be the income of the assessee ; and that even if they were " other income ", it was only of a casual and non-recurring nature, not arising from business or exercise of a profession or occupation (vide paragraph 4 of annexure " C " of the statement of the case). The statement of the case was sent up by the Tribunal formulating the two questions of law for decision of this court. In respect of the prior order of the Appellate Tribunal which was referred to and followed, as noted in the Tribunal's order and statement of facts, the matter came up to this court in Commissioner of Income-tax v. Dr.K.George Thomas [1974] 97 ITR 111 (Ker). This court on that occasion disagreed with the view taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he is served with notice of an order under section 254, by application in the prescribed form, accompanied where the application is made by the assessee by a fee of one hundred and twenty-five rupees require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty-days of the receipt of such application, draw up a statement of the case and refer it to the High Court : Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days ......" The answer to the reference is provided for in section 260, which it is unnecessary to extract. Section 260 makes it plain that the High Court is to answer the question referred, which, as seen from section 256, can only be one " arising out of the order " of the Tribunal. We are unable to find that the question of law as to whether the assessee was in receipt of income for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1975 : The questions referred are " (1) Whether, on the facts and circumstances of the case, the Tribunal was right in finding that the amount of Rs. 4,32,956 was not assessable as the income of the assessee for assessment year 1963-64 ? (2) Whether, on the facts and circumstances of the case, the Tribunal was right in finding that the amount of Rs. 4,32,956 are receipts of a casual and non-recurring nature not arising from business or the exercise of profession or occupation within the meaning of section 10(3) of the Income-tax Act, 1961 ? " In view of our decision in I.T.R. No. 22 of 1975, the two questions referred are answered in the negative, that is, in favour of the department and against the assessee. I.T.R. Case No. 25 of 1975 : Three questions have been referred. These questions are : " (1) Whether, on the facts and circumstances of the case, the Tribunal was right in finding that the amount of Rs. 3,32,000 (Rs. 3,40,000) was not assessable as the income of the assessee for assessment year 1969-70 ? (2) Whether, on the facts and circumstances of the case, the Tribunal was right in finding that the amount of Rs. 3,32,000 (Rs. 3,40,000) are receipts of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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