Income Tax Appellate Tribunal - Mumbai
Dr. J.C.N. Joshipura vs Assistant Commissioner Of Income-Tax on 23 June, 1995
Equivalent citations: [1996]56ITD424(MUM)
ORDER
M.K. Chaturvedi, Judicial Member
1. This appeal by the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-XVII, Bombay, and pertains to the assessment year 1987-88.
2. The solitary ground raised in this appeal relates to the question whether the travel grant of Rs. 15,000 received by the assessee from Jaslok Hospital is exigible to tax.
3. Briefly the facts : The appellant is an Orthopaedic Surgeon mainly attached to Jaslok Hospital. During the relevant assessment year, the appellant received a grant of Rs. 15,000 from the said hospital. This grant said to have been paid to the senior and deserving doctors attached to Jaslok Hospital once in three years for attending conferences or for study tour for advancement of knowledge and experience. A certificate dated 16-10-1986 bearing Ref. No. DRC/TG/86-87, was issued by the Jaslok Hospital & Research Centre. The scope of the grant was further elaborated as under:
In continuation of our certificate DRC/TG/86-87 dated 16-10-1986, this is to confirm that the travel grant of Rs. 15,000, which are given to Dr. G.C.N. Joshipura, was for the purpose of giving him an opportunity to get first-hand experience and become practically acquainted, at close quarters, with the rapid scientific developments, taking place all over the world, in the medical field-particularly in your specialised line of orthopaedics.
4. Travel grant was claimed as per prescription of Section 10(16) of the Income-tax Act, 1961, which reads as under:
10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included -
** ** ** (16) Scholarships granted to meet the cost of education.
The Assessing Officer did not allow the claim. He treated the said grant as professional income of the assessee and included the same in the computation of total taxable income. Being aggrieved the assessee preferred appeal there against before the CIT(A). The order of the Assessing Officer was confirmed by the CIT (Appeals).
5. S/Shri Jal Dastur & Bharat Talati, learned counsel for the assessee, appeared before us. It was vehemently argued that the travel grant of Rs. 15,000 was given to the appellant for the purpose of providing him an opportunity to get first hand experience and become practically acquainted at close quarters, with the rapid scientific developments, taking place all over the world, in the medical field-particularly in the assessee's specialised line of Orthopaedics. This grant was given pursuant to the furtherance of the cost of education. The assessee is an eminent Orthopaedic Surgeon. This grant is available only to the deserving doctors. The purpose of grant is advancement of knowledge and experience.
6. In order to explain the word "Scholarship", the learned counsel invited our attention on the meaning as given in the book Words and Phrases Legally Defined, 1974, Fifth Volume, 2nd Edition, page 16. We reproduce the relevant portion here as under :
I am not prepared to hold that according to common usages of speech or by reason of any authoritative definition, the word 'Scholarship' in the absence of, expressed purposes or conditions attached to it, connotes anything more than the grant" of an emolument, normally in a sum of money, to a scholar selected on merit or upon some other rational criterion, per Adam, J. (1965) V.R. 204, 206.
7. Our attention was also invited on the dictionary meaning of the word 'scholarship'. According to the Chambers Twentieth Century Dictionary, it means maintenance for a scholar, a benefaction. In Shorter Oxford Dictionary, the word is defined to mean the status or emoluments of a scholar. In Random House Dictionary it means the sum of money or other aid granted to a scholar. The learned counsel also given the dictionary meaning of the word 'Scholar'. According to the Chambers 20th Century, the Scholar means, one who has received a learned education: a man of learning. The Random House Dictionary it means a learned or erudite person esp. one who has profound knowledge of a particular subject.
8. The learned counsel further relied on the ratio laid down in the case of CITv. V.K. Balachandran [1984] 147 ITR 4 (Mad.).
9. Shri R.G. Sharma, learned Departmental Representative, appeared before us. It was contended that the amount in question was not granted to meet the cost of education. As is apparent from the perusal of the certificate, it was only a travel grant. Therefore, this cannot be claimed as exempt under Section 10(16) of the Income-tax Act. This amount neither a scholarship nor it was granted to meet the cost of education. No education was undertaken. As such, the benefit of the section is not available to the assessee. According to Shri Sharma, the meaning of the word 'scholarship' cannot be elongated so as to include travel grant also.
10. We have heard the rival submissions in the light of the material placed before us and the precedents relied upon. The objection of the revenue is in regard to the allowability of travel grant. The view taken by the revenue is that the travel grant cannot be construed to be scholarship. As per the prescription of the Section 10(16) of the Act, only scholarships granted to meet the cost of education can be allowed. In the present case, his scholarship was not granted to meet the cost of education. It was granted to meet the cost of travelling only. Therefore, this amount cannot be allowed as a deduction.
11. Each law consists of two parts, viz., body and soul; the letter of the law is the body of law and the sense and reason of the law is the soul of the law. The words in a section are riot to be interpreted by having those words in one hand and the dictionary in the other hand. In spelling out the meaning of the word in a section, it is sine qua non to see the purpose for which the provision is enacted.
12. Section 10(16) is enacted to further the cause of education. Now the question arise, what is education ? When someone is educated, in the Latin sense, 'e' - "out", and duco, "lead", it means that a teacher, by the discipline of school or college, had led or 'drawn out' the innate qualities and abilities of a pupil. But now the term cannot be confined within the limits of knowledge imparted at schools and colleges only. In the case of Chartered Insurance Institute v. London Corpn. [1957] 2 All. ER 638, the word 'education' was defined as under:
In one sense the word 'education' may be used to describe any form of training, any manner by which physical or mental aptitude, which a man may desire to have for the purpose of his work, may be acquired.
The meaning of the word 'education' has given in Black's Law Dictionary as under:
Comprehends not merely the instruction received at school or college, but the whole course of training, moral, intellectual and physical. Education may be particularly directed to either the mental, moral or physical power and faculties, but in its broadest and best sense it relates to them all.
13. The requirement of Section 10(16) is that the scholarship must be granted to meet the cost of education. Cost of education comprise within its ambit, not only tuition fee, which the student is required to pay to the Institution. It includes all other incidental expenses which are incurred for acquiring the education. The word 'education' includes within its ken, knowledge, understanding and reflection. One cannot get education just by paying tuition fee. One acquires knowledge by going to the school. But knowledge gathered at the school is not the complete education. The scope of education is vast. If one is required to travel to a place for the sake of education, the expenditure on travelling will also come within the ambit of the expression 'cost of education'. Therefore, travel grant given for the purpose of education shall form integral part of the cost of education.
14. In the case of V.K. Balachandran (supra), the Hon'ble High Court has observed that CBDT proceeded on a liberal understanding of the provisions of Section 10(16) and have accordingly given instruction to the Departmental Officials at the assessment level to grant exemption from tax to scholarships apparently without making much fuss about the precise nature of the receipts so long as the term of the scholarship do not contain any purpose extraneous to education.
15. Examining the etymology of the term 'scholar' we find that this word is derived from the greek word 'schole' which means 'leisure'. Later, when philosophers such as Aristotle and Plato taught groups of young men, the classes were termed 'schole'. This passed into Latin as 'schola', 'school' and so gave us school, scholar and all the related words.
16. Dealing with the basic postulates of a scholarships in Clause (16), the Hon'ble High Court in V.K. Balachandran's case (supra) has held that it is an 'income receipt'. Nevertheless, it is excluded from the total income by being brought under Section 10. The view of the income-tax statute of a scholarship, therefore, differs from the popular, or dictionary, view of a 'scholarship', whereas under the popular view, scholarship is education made available gratis, the sense in which the same expression is used in the Income-tax Act, is positive payment made to a scholar for pursuit of his education. The scholarship is made free, it would not naturally come within the ambit of Section 10(76). In the sense of payment made for studies, scholarship necessarily means some payment to meet the cost of education, the payment being made to the person pursuing the education and incurring the cost thereof.
There are, therefore, two considerations, which, altogether, make up the concept of a scholarship for meeting the cost of education within the meaning of Section 10(16). One is that the scholarship is a payment intended to be an income receipt in the hands of the scholar. The other one is that whatever is paid is intended to make the cost of education of the recipient. Since the purpose is to meet the cost of education. The question whether the quantum of the payment is adequate or inadequate or is or is not, in excess of requirements are of beside the point. The scholarship may only meet the partial cost of education. Still it would be a scholarship within the meaning of Section 10(76).
17. No we examine the purpose for which travel grant was given to the appellant. It was explained that it was given to provide an opportunity to get first hand experience and become practically acquainted at close quarters with the rapid scientific developments, taking place all over the world, in the medical field particularly in the line of orthopaedics.
18. Considering the profession of the appellant, his specialised knowledge in the field of orthopaedics and his educational qualifications, the appellant can very well be placed in the category of scholars. The travel grant was provided to the appellant so that he could sharpen his erudite in the field of orthopaedics. Therefore, in our opinion, the amount of Rs. 15,000 given to the assessee clearly comes within the ken of Section 10(16) of the Income-tax Act, 1961. We, therefore, direct the Assessing Officer to grant exemption as contemplated in the said section.
19. In the result, the appeal of the assessee stands allowed.