Pathak, J. - (1.) These appeals by certificate granted by the Kerala High Court are directed against the judgment of that High Court answering the questions referred to it by the Income-tax Appellate Tribunal in favour of the Revenue and against the appellant.
(2.) The assessee, who is the appellant before us, is assessed to income-tax in the status of an individual. He runs a printing press known as 'Kerala Dwani' and also a Malayalam daily newspaper of the same name. For the assessment year 1962-63, he filed a return of income showing a loss of Rs. 3,37,183/-. The Income-tax Officer found that various remittances from the United States of America had been received by him, ostensibly in his capacity as Vice-President of the India Gospel Mission. The assessee maintained two bank accounts with the Indian Overseas Bank, Kottayam. One account was in the name of the assessee and the other in the name of the India Gospel Mission. A credit of Rs. 5,85,637/-appeared in the account of the India Gospel Mission. The Income-tax Officer enquired into the utilisation of the funds credited in that account, and on examination of the material before him he found that the major part of the funds had been turned over to the newspaper 'Kerala Dwani' and a sizeable part had been utilised for household expenses by the assessee, such as the purchase of a cow, payment of house rent of his father, personal trips to Bombay, purchase of property by the assessee. and providing loan facilities to the assessee's close relatives including his father. brothers and others without interest. The personal expenses met from out of these funds and the amount utilised for the purchase of properties in the name of the assessee and his five brothers were claimed by the assessee as representing loans taken by him in his individual capacity to be repaid in subsequent years. The Income-tax Officer found that no interest had been charged on those drawings and that the account showed that the assessee had been operating on those funds in his complete discretion without regard to any stipulated principles or directions. He found that the purchases and the advances made for the purchase of properties found a place in the Balance Sheet prepared for the India Gospel Mission. He rejected the claim of the assessee that the newspaper, 'Kerala Dwani' had been taken over by the India Gospel Mission and that the assessee had nothing to do with it. He found that the statutory declarations required to be published by the newspaper annually showed that the assessee in his individual capacity was the owner of the press and the newspaper, and that nowhere was the India Gospel Mission shown as having any connection with them as such or through him as Vice-President of the India Gospel Mission. The Income-tax Officer came to the conclusion that on the examination of the entire material it was clear that the funds had been received mostly for assisting the assessee in running the newspaper, and that the funds of the India Gospel Mission and the newspaper 'Kerala Dwani' had all been mixed up and treated together as one unit and the assessee had been operating upon all these funds as the individual owner of both the newspaper and the funds. The Income-tax Officer observed that the remittances had been made to the assessee entirely because of his business activities and had been utilised by him for his business and personal activities. He held that the entire receipts of cash from the United States of America were relatable to the business activities of the assessee and were assessable to tax as the assessee's income. He rejected the explanation of the assessee that the drawings constituted loans taken from himself in his personal capacity and paid to himself as Vice-President of the India Gospel Mission. Following the decision in P. Krishna Menon v. Commr. of Income-tax, (1959) 35 ITR 48, he brought the amount of Rs. 5,85,637/- shown in the account of the India Gospel Mission to tax as the income of the assessee.
(3.) On appeal by the assessee, the Appellate Asistant Commissioner observed that the amounts withdrawn from the funds were merely loans repayable by the assessee to the India Gospel Mission but no definite finding was given on that question nor did he render any finding on the question whether the receipt of Rs. 5,85,637/- in the name of the India Gospel Mission constituted the income of the assessee. The Appellate Assistant Commissioner relied essentially on an earlier order made by the Income-tax Appelate Tribunal in the appeals arising out of the assessments made for the assessment years 1960-61 and 1961-62, in which years similar remittances to the assessee had been held by the Appellate Tribunal to be not taxable.;