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1 - 10 of 20 (0.20 seconds)Section 256 in The Income Tax Act, 1961 [Entire Act]
K. Sankaran vs Commissioner Of Income-Tax on 30 March, 1978
17. Mr. B, P. Rajgarhia has also relied on the case of K. Sankaran v. CIT [ 1978 ] 115 ITR 561, which is a decision of the Kerala High Court. In this case, the assessee retired as Chief Justice of the Kerala High Court in 1960. Between the assessment years 1962-63 and 1972-73 the assessee was appointed as arbirator or as a commission in certain matters for which he received remuneration. The Tribunal held that the remuneration received by the assessee was not of a casual nature and was income liable to tax. The Kerala High Court held that the activities of the assessee undoubtedly constituted "occupation" within the meaning of Section 10(3) of the Act and that the remuneration derived by the assessee was from an "occupation" and not of a "casual" nature. It was also held in this decision that from Section 10(3) of the Act it will be seen that unless a receipt satisfies the dual test of being of a casual and of a nonrecurring nature, it will not qualify for exemption from taxation and also even if the receipt satisfies the two tests, it will not be eligible for exemption if it is derived from business, or the exercise of a profession or occupation. On this basis, Mr. B. P. Rajgarhia has submitted that even if the receipt is not derived from business or exercise of a professior or occupation, even then the court has to see whether the receipt is of a casual and non-recurring nature and if the receipt is held not to be of a casual and non-recurring nature, then the receipt will be taxable.
Rani Amrit Kunwar vs Commissioner Of Income-Tax, Central ... on 21 December, 1945
19. Mr. L. N. Rastogi, learned advocate for the assessees, has relied on the case of Rani Amrit Kunwar v. CIT [ 1946] 14 ITR 561 which is a decision of the Allahabad High Court. In this case, the assessee was the wife of the Ruler of the Kalsia State and the sister of the Maharaja of Nabha State. She was residing at Dehra Dun in British India for some years with her sons and daughters. In the assessment year, she received a sum of Rs. 14,744 from the Kalsia State and Rs. 8,910 from the Nabha State. It was found that similar payments had been made to the assessee of varying amounts in all the years she had lived at Dehra Dun and that they represented allocations for her benefit made in the relative State budgets. In the case of payments from the Kalsia State, they were made for the purpose of meeting the assessee's household and living expenses and the education of her children and in the case of the allowance from Nabha State, it was made as an annual "wardrobe allowance" and as presents on certain days of festivals each year. She was not bound to account for the moneys although the payments appeared in the State budgets as State expenditure. There was no dividing line between the part of the income of the State which the Ruler spent for public purposes and that part which he spent for his private purposes, and in those circumstances it was held that the allowances received by the assessee from the Kalsia State were remittances from her husband and were taxable as income which must be deemed to have accrued to the assessee in British India under Section 4(2) of the old Act, and the question whether the remittances received by her were casual and non-recurring did not arise. It was also held that as there was no evidence in the case to show that the payments made by the Nabha State were attributable to custom, usage or traditional obligation and there was consequently no origin for the payments which could amount in its nature to a definite source so as to render each payment "income" and not merely a casual or annual windfall, these payments were not "income" and were not assessable to income-tax. It was also held in this decision that under the old Act, income in order to be taxable need not arise from any business activity, investment or an enforceable obligation to pay but may arise from voluntary or customary payments. Nor is it necessary that it should be the result of some outlay on the part of the assessee. It has also been held in this decision that the words "non-recurring nature" in Section 4(3) (vii) mean not that the payments have as a matter of fact not recurred but that they are not bound to recur. From this decision, it is evident that the amount received by the wife of the Ruler of the Kalsia State was treated as income because she was receiving it from her husband. However, as regards the payment made by Nabha State, there was no evidence that the payments were attributable to custom, usage or traditional obligation and there was consequently no origin
for the payments which could amount it its nature to a definite source and so it was held that the payments from Nabha State were merely a casual or annual windfall, these payments were not income and were not assessable to income-tax. Thus, the assessee is supported relating to payments from Nabha State. This is a casual or annual windfall and will not amount to taxable income.
H. H. Maharaj Rana Hemant Singhji, ... vs Commissloner Of Income-Tax, Rajasthan on 17 February, 1976
20. Mr. L. R. Rastogi has also relied on the case of H. H. Maharaja Rana Hemant Singhgi v. CIT [ 1971 ] 79 ITR 83 which is a decision of the Rajasthan High Court. In this case, on the merger of the Dholpur State, the question arose whether the "Dholpur House" should be treated as private property of the ruler or the property of the State of Rajasthan. By letter dated October 30, 1951, the Government of India informed the Maharaja of Dholpur that the said house would be considered to be the property of the Rajasthan State, but l/3rd of the rental value would be paid to His Highness as a purely ex gratia arrangement, and in the event of the sale of the house, His Highness would be entitled to l/3rd of the sale price minus the share of the Government of India in the form of 75% of the incremental value. The fact that the payment to the Raja was only an ex gratia payment was emphasised by the Government in subsequent correspondence also 1/3rd of the rent was continued to be paid to His Highness Maharaja Udai Bhan Singhji till his death and, thereafter, to Her Highness Malvindar Kaur, and then, to His Highness Maharaja Hemant Singhji, who was recognised as the ruler of the Dholpur State. These payments ceased when the said property was sold out. For the assessment years 1953-54, 1954-55, 1955-56, 1956-57, 1958-59, 1960-61, 1961-62 and 1962-63, the income from this property was taxed under Section 9 of the old Act, and for the assessment years 1957-58 and 1959-60, the income from this property was taxed under Section 12 of the old Act by the Income-tax Officer. In the appeals by the asses-see, the Appellate Assistant Commissioner took the view that the payments received by the assessee were casual receipts and were exempt from taxation under Section 4(3) (vii) of the old Act. The Tribunal reversed the order of the Appellate Assistant Commissioner. In those circumstances, it was held by the Rajasthan High Court that the various amounts received by the assessee were exempt from payment of tax as they did not form part of the taxable income being receipts of a casual and non-recurring nature: Merely because the Government of India continued to make payment for several years, they did not cease to be casual receipts : they were casual and non-recurring in nature inasmuch as they depended on the good wishes of the Government of India. Thus, this decision clearly shows that if a gift is made without any legal liability and depends on the good wishes of the donor, then it has to be held that it is a receipt of a casual and non-recurring in nature.
Dilip Kumar Roy vs Commissioner Of Income-Tax, Poona on 19 March, 1973
21. Mr. L N. Rastogi has also relied on the case of Dilip Kumar Roy v. CIT [ 1974 ] 94 ITR 1 which is a decision of the Bombay High Court. In this decision,
it has been held that in all the cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provision. It has also been held in this decision that merely because an assessee carries on a vocation, there is no presumption in law that any amounts received by him is income and has to be taxed and that the test in such cases is to find out if the sum is paid to the assessee in respect of his services and accrues to him by virtue of his office. It has also been held in this decision that where an amount is paid to a person as a personal gift for his personal qualities and as a token of personal esteem and veneration, it cannot be subjected to tax as income arising out of the business, profession or vocation under Section 10 of the Act Thus, it is evident that a personal gift as a token of personal esteem and veneration is not taxable.
Commissioner Of Income-Tax Tamil ... vs M. Ramalakshmi Reddy on 10 March, 1980
22. Mr. L. N. Rastogi has also relied on the case of CIT v. Ramalakshmi Reday [1982] 131 ITR 415, which is a decision of the Madras High Court. In this case, the assessee, a housewife, permitted two commercial concerns to take water from the well in her plot of land. The parties paid for the well water. The asses-see's claim that the receipt was casual in nature and hence not taxable was rejected by the Income-tax Officer. However, the Appellate Assistant Commissioner and the Tribunal accepted the claim and held that the receipt was not taxable. The Tribunal found that the assessee had no previous business dealings to her credit and was a mere housewife. Even when she allowed water to be taken from her well she had no intention of charging for the water. In those circumstances, the Madras High Court held that the receipt cannot be treated as a business profit and that a fact of the utmost importance in this case was that the assessee was a married woman who was intent upon building a family residence and running her family in it and who had no thought of running business of any kind on her own, and so it was held that the receipt was a casual and non-recurring receipt and hence not taxable.
Commissioner Of Income-Tax, Tamil ... vs B.M. Sundaravadanam on 20 August, 1982
24. It has also been held in the case of CIT v. Dr. B. M. Sundaravadanam [1984] 148 ITR 333 (Mad) that one K who was treated in 1958 by the respondent surgeon was completely cured of his ailment and a sum of Rs. 4,082 was paid by K to the respondent as and by way of professional charges. Subsequently, in 1960, K executed a deed of settlement by which he gifted an area of 33.38 acres of land specifically mentioning in the deed that the gift was made in order to show his feeling of gratitude to the doctor who had shown his kindness. The Income-tax Officer included a sum of Rs. 65,000 being the value of the lands gifted as income arising to the assessee out of his profession. In those circumstances, it was held by the Madras High Court that where a receipt is sought to be taxed as income, the burden lay on the Department to prove that it was within the taxing provision, and only where the character of the receipt is established as income, the burden of proof that it is not taxable lies on the assessee. It was also held in this decision that in view of the donor having already paid the assessee his professional charges as a doctor, there was no legal obligation on the part of the donor to make any further payment for the services rendered by the assessee and there was also no legal right in the assessee to receive any further payment for the professional services rendered earlier, and hence, it was not possible to hold that merely because the assessee was a medical practitioner, the gift received by him was towards the services rendered, and so it was held that the value of the lands gifted could not be included in the total income of the assessee as his professional income.
Rev. Father Prior, Sacred Hearts ... vs Income-Tax Officer, (Ernakulam), And ... on 29 August, 1956
25. It has been held in the case of Rev. Father Prior, Sacred Heart's Monastery v. ITO [1956] 30 ITR 451 (TC) that the donations received by a monastery for putting up a charitable institution and used for that purpose cannot be regarded as income and assessed to income-tax; they are of the nature of gifts and are capital receipts. It has also been held in this decision that assuming that such donations are of the nature of "income" and not capital receipts, they fall within Section 5(3)(vii) of the Cochin Income-tax Act which exempts receipts, which are of a casual and non-recurring nature from the liability to assessment. It has also been held in this decision that the mere fact that certain donations have recurred in some years is not sufficient to characterise them as "recurring receipts." In order that a receipt may be a "recurring receipt", there must be a claim or right in the assessee to expect its recurrence, and that a
voluntary gift depending entirely upon the goodwill of the donor does not, therefore, cease to be of a "casual and non-recurring nature" by reason merely of the fact that the gift is repeated.
Commissioner Of Income-Tax vs Tata Robins Frazer Ltd. on 21 November, 1985
28. We have held in CIT v. Tata Robins Frazer Ltd., disposed of on the 21st of November, 1985 [1987] 163 ITR 886 reasons mentioned on pages 895 to 897 that the circulars which are issued under Section 119 of the Act are binding on the Department and they have to be enforced. On this ground also, the assessees are bound to succeed as the gifts which are of a purely personal nature are held to be receipts of casual and non-recurring nature under Section 10(3) of the Act.