JUDGMENT

SABYASACHI MUKHARJI, J.:— These two appeals arise by certificate by the High Court in Income-tax References 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:

"(i) Whether, on the facts and in the circumstances 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 the case, the Tribunal was justified in law and had material for holding that the sums of Rs. 2,90,220 and Rs. 3,63,750 are exempt from taxation under S. 4(3)(vii) of the Indian Income-tax Act, 1922 for the assessment years 1960-61 and 1961-62 respectively?"

2. The references relate to assessment years 1960-61 and 1961-62. The assessees accounting year was the calendar year. The assessee publishes a Malyalam daily newspaper by name 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 States of America, during 1953 to 1957. During this period of stay in the U.S.A. he had the privilege of associating himself with the India Gospel Mission in the United States. The India Gospel Mission, 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 some time. In 1958, Shri Thomas, the father of the 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 returning to India after finishing his education in the States. Later on the assessee started publishing a paper called "Kerala Dhwani". This paper was started in 1959. While the assessee was in America, he took his Ph.D., degree.

3. 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 publishing 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. 2,57,138/- 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 Indian Christian Crusade, U.S.A. The Income-tax Officer found that the names and other details of persons who had donated the amounts were not available. He also found that, such amounts amounted in all Rs. 2,90,220/-. The Income-tax Officer had stated that in the absence of definite information regarding the individuals who had made the donations, it had to be presumed that the amounts had been given by the Indian Christian Crusade, U.S.A. to the assessee. The assessees case before the Income-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 held:

(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 qua