ALL SAINTS CHURCH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question has been referred under s. 256(1) of the I.T. Act, 1961, by the Income-tax Appellate Tribunal, Bangalore Bench, for the opinion of this court :

(2.) UPON appeal preferred by the assessee, the AAC reversed the view taken by the ITO. He observed that the church is engaged in various activities like prayers, thanks offerings, Bible readings, etc., and in the course of these activities, the church has been receiving donations and other offerings. Expenses incurred by the church are by way of salaries, church maintenance, parties, flowers, etc., and since the excess income over the expenditure could only be computed as business income, the assessee would be entitled to depreciation. Considering the nature of the activities of the church, the AAC held that the assessee was engaged in a vocation and, therefore, it was entitled to depreciation.

(3.) IN this reference, Mr. K. R. Prasad, learned counsel for the assessee, contended that there is no dispute that the assessee-trust is the owner of the church building and the church is engaged in a vocation like delivering sermons and preaching Bible which are the integral part of the church although they are being conducted by the Chaplain or the Presbyter-in-charge appointed by the Diocese whose head is the Bishop. He also contended that, regard being had to the activities of the church, it can safely be said that the church is engaged in the vocation.