November 2010
Income or capital receipt : S. 4 of Income-tax Act, 1961 : A.Y. 2004-05 : Assessee built temple of Goddess Adhiparasakthi : Devotees offered gifts to assessee on birthday : Gift amount not income : Not taxable.
By K. B. Bhujle | Advocate
New Page 1
Reported :
19. Income or capital
receipt : S. 4 of Income-tax Act, 1961 : A.Y. 2004-05 : Assessee built temple of
Goddess Adhiparasakthi : Devotees offered gifts to assessee on birthday : Gift
amount not income : Not taxable.
[CIT v. Gopala Naicker
Bangaru, 193 Taxman 71 (Mad.)]
As per profile submitted by
the assessee, he was born in a village. During his childhood, Goddess
Adhiparasakthi frequented his dreams to make it known that she wanted a temple
to be built to alleviate the sufferings of humanity and, accordingly, the
assessee had built a temple which was also known as ‘Sakthi peedam’. Out of
love, and affection and veneration, the devotees of the temple used to assemble
in great numbers on the eve of the assessee’s birthday and offer gifts. The
amounts of gifts so received by the assessee were shown as capital receipts in
his balance sheet. The Assessing Officer treated the gifts as having
nexus to his profession as a religious head and assessed the amount as income.
The Tribunal deleted the addition.
On appeal by the Revenue the
Madras High Court upheld the decision of the Tribunal and held as under :
“(i) In the instant case,
the assessee, as a religious head, was not involving himself in any profession
or vocation and also not performing any religious rituals/poojas for his
devotees for some consideration or the other. In fact, he was doing charitable
and spiritual work and made his devotees to follow the same for the benefit of
the mankind.
(ii) The devotees out of natural love,
affection and veneration used to assemble in large numbers on the birthdays of
the assessee and voluntarily made gifts, and by any stretch of imagination, it
could not be said that the amounts received by the assessee by way of gifts
would amount to vocation or profession. It was not the case of the Department
that the devotees were compelled to make gifts on the occasion of the
assessee’s birthday. The amounts/gifts received by the assessee could not be
said to have any direct nexus with any of his activities as a religious
person/head.
(iii) Moreover, in the
assessee’s own case in the A.Y. 1988-89, the Department had accepted the
position that gifts received by him on birthdays and other occasions were not
taxable. Since, there was no change in facts and law in the instant case, the
reasons assigned by the Tribunal were correct and there was no infirmity or
error apparent on the face of record in the impugned order.”
