Holding

Receipts received in connection with the assessee’s vocation of preaching and publishing, even if termed donations, constitute income arising from the exercise of a vocation and are taxable, not exempt under s.4(3)(vii).

Summary

K.G. Thomas, a journalist and propagator of Christian ideals, received large sums from the Indian Christian Crusade, U.S.A., which he claimed were personal gifts. The Income‑Tax Officer treated the amounts as remuneration for his vocation of preaching and publishing, and taxed them as business income for the assessment years 1960‑61 and 1961‑62. The Tribunal held the receipts were casual, non‑recurring gifts and not taxable, but the High Court reversed, finding a close link between the donations and the assessee’s vocation and holding them taxable. The Supreme Court affirmed the High Court, stating that receipts arising from the exercise of a vocation, even if labelled donations, are income and not exempt under s.4(3)(vii). Consequently, the appeals were dismissed and the amounts remained taxable.

Issues considered

Whether the sums of Rs.2,90,220 and Rs.3,63,750 were assessable as income of the assessee for assessment years 1960‑61 and 1961‑62
Whether the receipts were exempt from tax under section 4(3)(vii) of the Indian Income‑Tax Act, 1922

Legislation cited

Income Tax Act, 1922s. 12B, s. 4(3)(vii), s. 66(1)

Subjects

Income TaxSection 4(3)(vii)donationsvocationbusiness incomecasual receiptstax exemptionIndian Income Tax Act 1922assessment yearreligious propagation

Judgment

A
936
.
DR. K. GEORGE THOMAS
v.
THE C. I. T. KERALA, ERNAKllLAM

SEPTEMBER 23, 1985
I.I
[V.D. TULZAPURKAR AND SABYASACHI MUKllARJI, JJ.]

Indian Income Tax Act, 1922 - S.4(3)(vii) - Receipts -
Casual or non-recurring in nature - Arising out of an avoo.ation -
Whether income exigible to tax - Link between activities of
c assessee and payments received - Relevancy ofa

The assessee-appellant had associated himself with the
India Gc;>gpel Mission while he was get ting his education in the
United States of America during 1953 to 1957 and was propagating
the ideals of Indian Christian Crusade, U.S.A., an institution
sponsoring religious education in IndJa, The India Gospel Mission
D wns collecting money for its working abroad through the Indian
Christian Crusade. On returing to India in January 1957 he
started publishing a religious magazine called "Viswa Deepatn" and •
iu 1959 started publishing Malyalam daily newspaper called
"Kerala Dhwani", In the assessment year 196o-6l he filed a return
disclosing a loss of Rs.1,59,894 under the head 'husiness'.
While scrutinising the accounts, the Income Tax Office found
E amounts totalling Rs.2,90,220 credited in the assesaee's
accounts. Since the names and other details of persons who had
donated the amounts were no: available it had to be presumed that
the amounts had been given to the assessee by the Indian •
Christian Crusade, U.S.A. lilld, therefore, the Income Tax Officer
rejected the contention of the assessee that the amounts received
F by him were purely personal gifts and testimonial• made
voluntarily and held that the so called donations were payments
by way of remuneration for the work done by the assessee in
connection wlth the spreading in India, of the ideals of the
Indian Christian Crusade, U.S.A. and that these amounts were
connected with the business of the assessee and were liable to be
G taxed as his business income. He, therefore, brought to tax
Rs.2,90,220 which had been received during the assessment year
196o-61.

For the &ssessment year 1961-62 the assessee had received
similar amounts totalling to Rs. 3, 63, 750 through the Indian
Christian Crusade, U.S.A. and Income Tax Officer treated this .('
~unt also as business income and brought the same to tax.
K.G.THOMAS v. c.r.T.,KERALA 937
A
The assessee filed appeals and the Appellate Assistant
Coumissioner while diSlllissing the appeals held that the assessee
Was a journalist and it was his avocation or vocation to
propagate Christian ideas and ideals and that the assessee during
the stay in U.l>•A· and after his return was engaged in a movement
for the spread of religion and for fighting the forces of B
atheiS111.

In further appeal, the tribunal held that the amounts did
' not represent remuneration or· payments for services rendered, and
that the receipts were clearly casual and non-recurring and did
not arise in the course of the exercise of any vocation. c
The Tribonal referred the matter to the High Court, which
held that the receipts of casual and non-recurring nature would
not be included in the total income of a person. But i f there was
receipts arising from the exercise of a vocation, these would be
included in the total income, even if these were of a casual or D
non-recurring nature or voluntary and the receipts resulting from
such payments would be outside section 4(3)(vii) of the Income
• Tax Act, 1922. Since there was link between the activity of the
assessee and the payments and the same were made by those who
helcl similar viewa and who were interested in the propagation and
the acceptance of those views by the general public, the E
receipts, therefore, arose from the exercise of an occupation by
the assessee.

DiSlllissing the Appeals,

lll!LD: 1. The receipts by the assessee arose out of the
avocation of the assessee of propagating viewa against atheism F
and preaching Christian Gospel. (947 HJ .
0
2. There was a link between the activities of the assessee
and the payments received by him and the link was close-enough.
[948 A)

St:rong & Company. of llallley Lild.ted V• Voodif:leld (Soneyor G
of Toea), 1906 A.c. 448 and l'be "-1ss:loner of Inland Bevenue
v. E.c. Warnes &Co. Ltd., (1919) 12 r.c. 227, referred to.

3. Section 4(3)(vii) of the Indian Income Tax Act 1922
makes it clear that in order to be entitle! to the exemption, the
receipts must be of income character first. if a sum of money is H
~ received for the purpose in pursuance of an avocation or
vocation, it arose oilt of this vocation or profession. If that is
938 SIJPREHll COURT REPORTS [19851 SUPP.2.s.c.R.
A
so, then this was income under the Act. Such income could only be
eccluded if it was specifically excluded by any provision of the
Act. [943 D-EJ

4. The High Court rightly held that in view of the facts
B and circumstances of this case as found by the Tribunal, these
amounts were received by the assessee in the course of his
avocation or vocation and were given to him for the purpose of
the same. These were, therefore, incomes which were neither of a
casual or non-recurring nature nor were these capital gains under r
s.12B of the Act. The amcunts were, therefore, clearly taxable as
c held by the Income Tax Officer and by the High Court. [943 E-G]

P~ Krishna llenon v. Cawfastoner of Incme-Tax, llyso:re,
Travancor~ and Coorg. Bangalono. 35 I.T.R. 48, relied
upon.
5. The burden is on the revenue to establish that the
receipt is of a rev.!'nue character. Once receipt is found to be of
D a revenue character whether it comes under eKemption or not, it
is for the assessee to establish. Facts must be found by the
Tribunal and t)le High Court must proceed on the basis of those •
facts. The High Court cannot afresh go to the facts over-ruling
the facts found by the Tribunal unless there is a question to
that effect challenging the facts as found by the Tribunal. In
this case the High Court has not interferred with the basic facts
E found by the Tribunal. It has been established that the assessee
was carryivg on a vocation of preaching of Christian Gospel and
helping anti-athesim. He was running a newapaper in aid of that.
The donations received from America were to help him for the said
purpose. They arose out of his carrying on and continued so long
.,,
as he carried on this .e..vocation or vocation. These receipts,
F therefore, arose out of Jils vocation. These were, therefore, his
income, not exempt under s.4(3)(vii) of the Act and were taxable.
[945 H, 946 A-CJ

Parimisetti Seetbaraw. v. r..._tesfoner of Income Taz,
Audhra Pradesh, 57 I.T.R. 532 inapplicable. .,
G
Acharya D.v. Pande v. 0-fssioner of IncoE-tss, Gujarat,
56 I.T.R. 152, Ccmissioner of Tor· ... tax, Gujarat v. Sbri
Girdbarraa Bariraa Bhagat, 154 I.T.R. 10, lfabaraj Sbri GoviDdlal-
ji Ranchhocllslji v. Ccmissioner of hv:,, t ta.9 Alnpd•bad, 34
I.T.R. 92, H.B. Haharani Sbri Vijay luverba Sabeb of lfoni and
H Another v. Coimisaiooer of IDccme-tax .Bollbsy City II, 49 I.T.R.
594, S.A. Rakrialman V• Coon1asiooer of ltv taK, Madras, 114 .,.
I.T.R. 253, SJddhartba l'llblications (P) Ltd· v. Comiasioner of
K.G.Tt!OMA5 v. C.I.T.,KERALA [SABYASACHI MUKHARJI, J.j 939

A
lDcome-tax, Delhi. 129 I.T.R. 603, Kamani Properties Ltd. v.
Comnissioner of Income-tax, West BeiJgal, 82, I.T.R. 547,
Aluminium Corporation of India Ltd. v. Commissioner of
Income-tax, West BeiJgal, 86 I.T.R. 11, Anil Kumar lloy C>olidhury
and Ohters v •. Ccxmissioner of Income-tax, West Bengal II, 102
I. T .R. 12, Coomissiooer of Income-tax, West BeiJgal Ill v. Kamal B
Singh Rampuria, 75 I.T.R. 157, Coaaissioner of Income-tax, West·
BeiJgal Ill v. Imper1al Ciemical Industries (India) (P) Ltd. 74
I.T.R. 17, Cannfssioner of In&:cme'-t:ax, Bombay City II v. Devi
Prasad Xbandelwal and Co. Ltd. 81 I.T.R. 460, and C<ndssiooer of
i:n.:.--tax v. P.S. Chelladurai, 145 I.T.R. 139, referred ti>•
G
CIVIL APPELLATE JURISiJIGTION: Civil Appeal Nos. 295 & 296
(NT) of 1974.

From the Judgment and Order dated 19. 7 .1973 of the Kerala
High Court in I.T.R. Nos. 32 and 33 of 1971.
D
S. Poti, s. Sukumaran and D.N. Mishra, for the Appellant •
• G.c. Sharma, K.G. Dua and Miss A. Subhashini, for the
Respondent.

The Judgment of the Court was delivered by E

SABYASACHI MUKllARJI, J. These two appeals arise by
certificate by the High Court in Income-Tax Reference Nos. 32 and
33 of 1971. The High Court of Kerala by its judgment dated 19th
"' July, 1973 answered the following two questions in the negative
and in favour of the revenue. .
F
"(i) Whether, on the facts and in the cire;umstances of
the case, the Tribunal was justified in law in holding
that the sums of Rs. 2,90,220 and Rs. 3,63,750 were
not assessable as income of the assessee for the
assessment years 1960-61 and 1961-62?
•
(ii) Whether, on the facts and in the circumstances of G
the case, the Tribunal was justified in law and had
material for holding that the sums of Rs.2,90,~20 and
Rs. 3,63,750 are exempt from texation under section
4(3)(vii) of the Indian Income-tax Act, 1922 for the
assessment years 1960-61 and 1961-62 respectively?"
• H
The references relates to assessment years 1960-61 and
1961-62. The asses see' s accounting year was the calender year.
940 SUPREME COURT REPORTS [1985] SUPP •.2 s.c.R.
,.
The assessee publishes a Malyalam daily newspaper by nam~ Kerala
Dhwani. Till 1953, he was a lecturer in History and Political
Science in the College at Kottayam. He had his education in the
United State of Americal., during 1953 to 1957. During this
period of stay in the U.S.A. he had the privilege of associating
himself with the lndia Gospel Mission in the United States. The
ll India Gosvel Mision, it was stated, was collecting money for its
working abroad through the Indian Christian Crusade. The assessee
was also publishing a religious magazine called "Viswa Deepam".
The magazine was started in January, 1957. The father of the .,..
assessee Shri K.G. Thomas was the Editor of Viswa Deepam. Shri
Thomas was also in America and he was also doing missionary work
in America for s01ne time. ln 1~58, Shri Thomas, the father of the
c assessee was in India. He was going to America off and on. Indian
Christian Crusade, U.S.A. is an institution sponsoring religious
education in India and it was admitted that the assessee was
propagating the ideals of the Indian Christian Crusade on retut"n-
ing to India after finishing his education in the '::itates. Later
on the assessee started publishing a paper called "Kerala
Uhwani". This paper was started in 1959. While the assessee was
U in America, he took his Ph.D. degree. ·"'

For the assessment year 1960-·61, the assessee filed a
return disclosing a loss of Rs.1,59,894 under the head
'business'. The assessee, as mentioned hereinbefore, was publish-
ing Malayalam daily newspaper called 'Kerala Dhwani'. While
scrutinising the accounts, the Income-tax Officer found in the
ledger folio in .the name of the assessee amounts totalling
Rs.2,57,13ti credited in his account. The assessee was asked to~
explain- these credits and he represented that most of the amounts
were received by the assessee as donations from U.S.A. through an
organisation known as lndian Christian Crusade, U.S.A. The
F Income-tax ·officer found that the names and other details of
persons who had donated the amounts were not available. He also
foWld that such amounts amounted in all Rs.2,90,220. The
lncome-tax Officer had stated that in the absence of definite
informatioii. regarding the individuals who has ma.de the donations, •
it had to be presumed that the amounts had been given by the
lndian Christian Crusade, U.S.A. to the assessee. The assessee's
case betot·e the lncome-tax Officer was that the amounts received
by the assessee were purely personal gifts and testimonials which
were given because of the esteem and regard for the personal
qualities of the assessee and that the payments were purely
voluntary. The Income-tax Officer rejected the contention. He ....
H
held: -

J
K.G.THOMAS v. C.I.T,KERALA [SABYASACHI MUKHAR.Jl, J.J 941

(i) The payment of donations started simultaneously with the ·
publication of the daily newspaper Kerala Dhwani and the
donations were continued during the period the publication
continued. (ii) The donations were regular and continued for the
next year also. (iii) There was nothing to show that the amounts
were given on account of the personal qualities of the assessee.
B
(iv) The donations were. being made regularly throughout the year
and these were evidently given as aid to the rurming of the
newspaper which was the business .carried on by the assessee. (v)
The indian Christian Crusade, U.S.A. which was paying money to
the assessee was an enterprise in India established for the
furtherence of id:=a.ls and objectives similar to theirs.
c
.For aforesaid reasons the Income-tax Officer held that the
so called donations were liayments by way of remuneration for the
work done by the assessee in cormection with tpe spreading, in
lndia, of the ideals of the Indian Christian Crusade, U.S.A. The
lncome-tax Officer came to the conclusion that the amounts paid
D
to the assessee were connected with the business of the assessee
and were liable to· be taxed as the business income of the
assessee. He, ·therefore, brought .to tax Hs. 2, 90,220 which had
been received during the assessment year.

For the next assessment year, the assessee had received
• similar amounts totalling to Rs.3,63,750 through the Indian
Christian Crusade, U.S.A. For the reasons given in the order of
the previous year, the Income-tax Officer treated this amount
also as the business income for the assessment year 1961-62 and
brought the same to tax •
•
The assessee filed appeals in respect of both the years and
F
the Appellate Assistant Commissioner disposed of the appeals by
different orders delivered on the same date. He discussed all the
contentions raised by the assessee in his appellate orders. The
main content.ion. raised by the assessee before the Appellate
Assistant Commissioner was that the various amounts credited in
7 his bank account and in his personal acc~unt in the business G
represented gifts made by personal frierids in the U.S.A., that
the amounts were collected by the lndian Christian Crusade and
torwarded to lndia to the assessee. The Appellate Assistarrt
Connnissioner ri;jecting these contentions of the as_sessee found
that the assessee was a journalist and it was his avocation or
vocation to propagate certain ideas and ideals. He was closely
H
associated with the missionary work carried on by the Indian
-*Christian Crusade in America and he was propagating the ideals of
942 SUPREME COURT REPORTS [1985j SUPP.2 S.C.R.

A Indian Christian Crusade, America in India because of his close
relationship with that orgainsation as mentioned hereinbefore.
The assessee during his stay in U.S.A. and after his return was
engaged in a movement for the svread of religion and for fighting
the forces of atheism. &curding to the assessee, his friends in
America and those who believed in the cause which he sponsored
were sending him donations for helping the movement and the
amounts that were handed over to or were collected by the Indian
Christian Crusade, U.S.A. were remitted to him.

ln further appeal the Tribunal held that the amounts did not
represent remuneration or payments for services rendered. The
tribunal further held that the receipts were clearly causal and
c non-recurring and did not arise in the course of the exercise of
any vocation. Then the aforesaid two questions were referred to
the High Court under Section 66 (1) of the Indian Income-tax Act,
19Z2.

The High Court held that the receipts of casual and
non-recurring nature would not be included in the total income of
D a person. But if there were rceipts arising from the exercise of
a vocation, these would be included in the total income, even if
these were of casual or non-recurring nature or voluntary and the
receipts resulting from such payments would be outside Section
4(3)(vii) of the lncome-tax Act, 1922 .(hereinafter referred to as •
the ('Act').
E
Relying on the findings of the Tribunal, the High Court
held that the assessee was very actively, fully occupied with the •
activities connected with achieving the Objects of strenghtening
faith in God and fighting against atheism and was occupied with
this affair. The paper which he published for this purpose was a
F daily coming out with views in support of this mission. Teaching
and propagating religion could be an occupation. It was not
necessary that its Object should be to earn a liVelihood.
Anything in which a person was engaged systematically could be an
occupation or vocation. The next question would be whether 1
receipts could be said to arise from such occupation or vocation.
G lbere wcis link between the activity of the assessee and the
payments, and that the payments were made by those who held
similar views as those of the assessee and who were very much
interested in the propagation and the acceptance of those views
by the general public. The payments were made for the purpose of
helping the assessee to run the paper which was the mouth-piece.
H or medium through which the ideas were to be spread. The•
K.G. THOMAS v. C.LT,KERALA [SABYASACHI MUKHARJI, J. J 943

connection between the activity of the asessee and the donations A
was thus intimate. It arose out of the vocation or the occupation
carried on by the assessee. Therefore, the receipts arose from
the eercise of an occupation by the assessee. The High Court also
considered whether such payments were excluded by Section
4(3)(vii) of the Act.
B
Section 4 of the Act made the total income of the previous
year of any person assessable to tax and sub-section (3)
specified certain incomes which should not be included in the
total income of the person. Sub-section (vii) of Section 4(3) was
in the following terms:
c
'"(vii) any receipts not being capital gains chargeable
according to the provisions of section 12B and not
being receipts arising from business or the exercise of
a profession, vocation or occupation, which are of a
casual and non-recurring nature or are not by way of
addition to the remuneration of an employee." D

As the section made it clear, in order to be entitled to
exemption, the receipts mUst be of income character first. In the
instant case, there is no doubt that if a sum of money is
received for the purpose in pursuance of an avocation or
vocation, it arose out of this vocation or profession. If this is
so, then this was income under the Act. �uch income could only be E
excluded if it was specifically excluded by any provision of the
Act. The /Jigh Court held, and in our opinion ri�htly, that in
vie w of the facts and circumstances of this case as found by the
Tribunal, these amounts were not excluded under Section 4(3)(vii)
of the Act. The position was thus, these amounts were received by
the assessee in the course of his avocation or vocation and were F
given to him for the purpose of the same. These were therefore
incomes which were not also of a casual or non-recurring nature
nor were these capital gains under Section 12ll of the Act. If
that was· the position, then, in our opinion, the amoUnts were
clearly taxable as held by the Income-tax Officer and by the High
�tt. G

Several aspects of the question were placed before us on a
large canvass namely that the High Court had gone into facts of
the first time over-ruling the findings of the fact of the
Tribunal without there being a question to that effect and also
there was no finding that the recceipts were of income character. H
> In support of these contentions, several decisions of this Court
were referred before us, Inter alia, Pari.misetti Seetbaramna v.
SUPKEME CUURT REPORTS [1985] SUPP.2 s.c.R.

A Comnissioner of Income-Tax, Aodhra Pradesh., 57 LT.R. 532.
Keliance was placed on the observations appearing at pages 536,
537 and 53� of the said report. It was urged that the burden of
proof was wrongly placed by the High Court and on the facts, that
the two circumstances relied on by the High Court did not
establish that certain money was given to the assessee as remune
B ration for services and as such it could not be held that the
person concerned was assessable to tax. It was urged that the
High Court wrongly placed the burden of proof upon the assessee.

But on the facts and in the circumstanes of this case, the
conclusion recorded by the High Court in the instant case was
borne out on the facts on record. The observations of this Court
c referred to above cannot be of much assistance to the assessee.

The case which is most apposite to the facts of the instant
case is a decision of this Court in the case of P. Krishna Menon
v. Comnissioner of Income-Tax, Mysore, Travancore-COChin and
Coorg. Bangalore., 35 1. T .R. 48. There after retirement from
government service, the appellant therein was spending his time
D in studying and teaching Vedanta philosophy. L, who was one of
his disciples, used to come from London at regular intervals to
Trivendrum where the appellant resided, and stay there for a few
months at a ti.me and attend his discourses, and so received �

instructions in Vedanta and had the benefits of his teachings. L
tranferrred his entire balance standing to this credit in his own
E account at Bombay, amounting to more that ks. 2 lak.hs, to the
account of the appellant opened in the letter's name in the same
bank at liombay. Thereafter, from time to time, L put in further
stuns into the appellant 1 s account in Bombay. Tne question was
whether the receipts from L. constituted the appellants income
taxable under the Travancore Income-Tax Act, 1121 (Malayalam �ra)
F which was identical with the lndian Income-Tax Act, 1YL2. It was
held th.at teaching was a vocation, if not a profession, and
teaching Vedanta was just as much teaching as any other teaching
and therefore a vocation; that in order that an activity might be
called a vocation it was not necessary to show that it was an
organised activity and that it was indulged with a motive of
G making profit; it was well established that it was not the motive
of a person doing an act which decided whether the act done by
him was the carrying on of a business, profession or vocation;
and if any business, profession or vocation in tact produced an
income, that was taxable income and none the less so because it
was carried on without the motive of producing an income; that
If teaching of Vendata by the appellant in that case was the�
K. G. THOMAS v. C.I.T,KERALA [SAllYASACHl MUKHARJI, J. j 945
,

carrying on of a vocation by him and that the imparting of tha A
teaching was the causa causans of the making of the gifts by L,
and it was impossible to hold that the payments to the appellant
had not been made in consideration of the teaching imparted by
him, and that, therefore, the payments were income arising from
the vocation of the appellant, that the payments made by L were
income arising from a vocation. These were not casual or B

non-recurrng receipts and no question of exemption under Section
4(3) (vii) of the Act arose. It was further observed that in order
that a payment might be exempted under Section 4(3)(vii) as a
casual and non-recurring receipt, it had to be shown that it did
not arise from the exercise of a vocation.
c
In the instant case before us, identical is the position.
The assessee carried on a vocation of preaching against atheism.
In the course of such vocation and for the purpose of the same he
received the amounts in question as donation for the furtherance
of the objects of his vocation. The receipts arose to the
assessee for the carrying on of the vocation by the assessee, and D
these were not casual and non-recurring. These were taxable.
These facts were found by the Income-tax Officer. These facts not
in so many terms but essentially found by the Appellate Assistant
Commissioner and were reiterated by the Tribunal and the High
Court accepted these findings of facts and answered the question
·

accordingly.
E
Reliance was also placed on the decisions of the Gujarat
High Court in the case of Acharya D.V. l'ande v. ec.aiasiooer of
I.ncme-tax, Gujarat. , 56 I.r.R. 152 . , and ea-•ssiooer of
Iocaoe-tax, Gujarat V• Shri Gi.rdbarralll Barir- Bhagat, 154
I.T.R. 10. , decisions of the Bombay High Court in the Case of
Maharaj Sbri Govindlal.ji Banchhncla l lji v. r,_fssiooer of F
lncme--tax, Alnpdabad , 34 I.T.R. 92. , and R.H. llabarani Sbri
Vijaylwverba 5abeb of llorvi and Anotber v. C<nw•ssioner of
I.ncme-tax, Bombay City II, 49 I. T .R. 594. , decision of the
Madras High Court in the case of S A . ilaml!krl;�
. ; "" v.
Ccna!ssiooer of Inccme-tax, Madras , 114 I. T.R. 253. , and
·decision of the Delhi High Court in the case of SL�tha G
Publicatioos (P) Ltd. v. c.oi.msaiooor of 1---tsx, llal.b:l, 1 �9
I.T.R. 603. , dealing with certain facts and circumstances where
income could be said to be taxable.

From all these decisions, two facts emerge. The burden is
on the revenue to establish that the receipt is of a revenue H

ll character• Once receipt is found to be of a revenue character
946 SUPREME COURT REPORTS [1985] SUPP . 2 . s.c.R.

A �hether it comes under exemption or not, it is for the assessee
to establish. Facts must be found by the Tribunal and the High
Court must proceed on the basis of the facts found by the
Tribunal . The High Court cannot afresh go to the facts
over-ruling the facts found by the Tribunal unless there is a
question to that effect challenging the facts found by the
Tribunal . These propositions are well-settled and in this case in
the decision of the High Court, these principles , in our opinion,
have not been breached. It has been established that the
assessee was carrying on a vocation, the vocation preaching of
Christian Gospel and helping anti-atheism was the vacation of his
life. He was ruillling a newspaper in aid of that . The donations
c received from America were to help him for the said purpose. They
arose out of his carrying on and continued so long as he carried
on this avocation or vocation. These receipts therefore arose out (
of his vocation. These were therefore his income. In the facts
these were not exempt under Section 4(3) (vii) of the Act . In the
premises these were taxable.

D Numerous decisions were referred to us on the question as to
how far the High Court could interfere with the facts found by
the Tribunal. Reliance was placed on the decisions of this Court
in the case Karnani Properties Ltd. v. Commissioner of
Income-tax, West Beagal, 82 , l . T . R . 547 . , Alulini\D Corporation
of india Ltd. v. Commissioner of Income-tax, West Beagal, 86
I. T . R . lL , Anil Kumar Boy Chowdhury and Others v. Commissioner
E of Income-tax, West BePgal II, 102 I . T . R . 1 2 . , Commissioner of
Income-tax, West Bengal III V• Kamal Singh llallpuria , 75 l. T .R.
157 . , Commissioner of Income-tax, West Bengal III v. Imperial
a...cal .I lDdustries (lDdia) (P) Ltd. , 74 I . T . R . 1 7 . , and the
decision of the Bombay High Court in the case of Commissioner of
Income-tax, Bombay City II v. Deviprasad Kbaodelwal and Co. Ltd.,
F 81, l . T .R. 460. , and also the decision o f the Madras High Court
in the case of Commissioner of Income-tax v. P.S. a.elladurai. ,
145 l . T . R . 139.

We have set out the findings of the Tribunal and cons idered
the findings of the Tribunal as well as the judgment of the High
G
Cour t . There has not been any unwarranted interference by the
High Court with the facts found by the Tribunal. Basic facts have
been found by the Tribunal.

On the ques tion where income could be said to arise, it may
be relevant to refer to Strong & Co . of Homsey, Limited v.
H Woodifield (Surveyor of Taxes) , [ 1 9061 A . C . 448. There a brewery
K.G.Yl!OOS v. C . I . T . ,KERALA (SABYSACHI MUKHARJI, J.] 947

A
company owned an inn which was carried on by the manager as part
of their business. A customer sleeping in the inn was injured by
the fall of a chimney, and recovered damages and costs against
the company for the injury, which was owing to the negligence of
the companys servants . The question was whether the amounts paid
as damages could be claimed as a deduction from the business of B
carrying on the activities of the inn-keeper. The Lord Chancellor
observed at p;ige 452 of the report as follows :

"I think only such losses can be deducted as are
connected with in the sense that they are really
incidental to the trade itself . They cannot be deducted c
if they are mainly incidental to some other vocation
or fall on the trader in some character other than that
of trader. The nature of the trade is to be considered .
To give an illustration, losses sustained by a railway
company in compensating passengers for accidents in
travelling might be deducted. On the other hand , if a D
man kept a grocer ' s shop, for keeping which a house is
necessary , and one of the window shutters fell upon and
injured a man walking in the street, the loss arising
thereby to the grocer ought not be deducted . Many cases
might be put near the line , and no degree of ingenuity
can frame a formula so precise and comprehensive as to K
solve at sight all the cases that may arise . "

In the case of The Cmmissioner of Inland Revenue v. E.G.
Warnes & Co. Ltd . , [1919] 12 T.C. 227 . , at page 231 of the
Report , Rowlatt J . observed :

"I may shelter myself behind the authority of Lord F
Loreburn, who, in his judgment in the House of Lords in
Strong & Co. v. Woodifield, said that it is impossible
to frame any formula which shall describe what is a
loss connected with or arising out of a trade . That
statement I adopt, and I am not sure that I gain very
much by going through a number of analogies; but it
seems to me that a penal liability of this kind cannot G
be regarded as a loss connected with or arising out a
trade .

In the instant case there cannot be any doubt that the
receipts by the assessee arose out of the avocation of the asses-
lr see of propagating views against atheism and preaching Christian H
Gospel.

..
948 SUPREME COURT REPORTS [1985] SUPP. 2 s.c.R.

A In view of the facts and circumstances of the case there
was a link between the activities of the assessee and the
payments received by him and the link was close-enough. In that
view of the matter, in our opinion, the High Court was right in
B answering both the questions referred to it in the negative and
in favour of the revenue . The appeals accordingly fail and are
dismissed with costs.

Civil Miscellaneous Petition No . 10046 of 1976 for
C condonation of delay in filing the additional papers is allowed .

'
A.P.J. Appe&ls dismissed.