N.K. Unnikrishna Panicker vs Commissioner of Income Tax

A.M. Shaffique, J.—This appeal is filed against the order passed by the income tax Appellate Tribunal, Cochin Bench in T.A. No. 945/Coch/2008 (2002-03). The short facts of the case is that the appellant an astrologer by profession, has filed a return of income disclosing a turnover of Rs. 2,67,430. After claiming various expenses, he returned an amount of Rs. 1,89,751 as income from his profession. In the statement of affairs as on March 31, 2002, the appellant had shown Rs. 10,00,000 being contribution from certain persons and claimed that the said sum has been exempted. The Assessing Officer did not accept the said contention. An appeal was filed before the Tribunal and the Tribunal concurred with the view expressed by the lower authorities. In the present appeal, the appellant has raised the following substantial questions of law:

(i) In the facts and circumstances of the case, ought not the Tribunal to have held that a sum of Rs. 10 lakhs received as gift from the people of Tamil Nadu to the appellant is not taxable under the Act?

(ii) In the facts and circumstances of the case, ought not the Tribunal had held that the sum of Rs. 10 lakhs gifted to the appellant was not to be taxed as income under the income tax Act for the relevant period?

The main contention urged by the learned counsel for the appellant is that the amount of Rs. 10,00,000 was received from some persons who had given confirmation letters. In the confirmation letters they have, inter alia, indicated that the contributions were paid by them since they were happy on account of the assembly election results of Tamil Nadu in the year 2001. As far as the appellant is concerned, he is an astrologer by profession and he predicted the election result of their leader Puratchithalaivi and since the persons mentioned aforesaid were grateful to the prediction made by the appellant these contributions had been made. The contributions being in the form of gift is not taxable and, therefore, the Assessing Officer committed error of law in taking into consideration the said amount as a taxable income. Reference is also made to the judgments in S. A. RAMAKRISHNAN Vs. COMMISSIONER OF Income Tax, MADRAS., , Commissioner of Income Tax Vs. J.C. Wahal, and Commissioner of Income Tax, Tamil Nadu-I Vs. B.M. Sundaravadanam,

Learned standing counsel for the Commissioner of income tax, however, contends that no question of law arises for consideration in the above matter. The assessee originally contended that the amounts were received from various persons from Tamil Nadu and later letters were given staring that an amount of Rs. 10,00,000 was received from seven political leaders. Since the Assessing Officer, appellate authority and the Appellate Tribunal considered the entire questions on the factual material available on record and had found that Rs. 10,00,000 is the income from business of the assessee, no question of law arises for consideration.

Having heard learned counsel appearing for either side, we are of the view that the only question to be considered is whether the amount of Rs. 10,00,000 is the income from the business of the assessee or received by the assessee in the form of gift from the persons mentioned in the confirmation letters. On a reference to the assessment order, it is clear that the assessee had originally made a statement that the amount was received from several persons from Tamil Nadu. It was later that he was able to produce the confirmation letters which only indicated that the assessee was instrumental in the election victory of certain candidates and that as a mark of admiration, some amount was given to the assessee. The Assessing Officer proceeded on the basis that the assessee had rendered certain services in the form of performing poojas and further procedures. The amounts were paid when certain candidates were elected in the election as stated by the assessee. This, according to the Assessing Officer, has to be treated as an income from business. As without rendering service, there was no question of the assessee getting such amounts from the persons alleged to have given such amounts to the assessee. The appellate authority also concurred with the said view. The judgments relied upon by the appellant were not applicable to the factual situation raised in this case on account of the findings in the assessment order as well as by the appellate authorities. The Tribunal also on a re-appreciation of the evidence as well as the legal issues involved in the matter concurred with the view expressed by the appellate authority as well as the Assessing Officer. In that view of the matter, we do not think that any substantial question of law arises for consideration in the above appeal. We confirm the findings of the Tribunal in this regard. Accordingly, there being no merit in the appeal, the same is dismissed.