BOEING Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee contends that the value of an ambassador car received by it as a gift under a gift scheme formulated by the Bombay Dyeing and Manufacturing Company Limited in the centenary year of that company the gift scheme providing for such gifts to those dealers who purchased more than Rs. 8 lakhs worth of goods from the company-is not income which is exigible to tax under the Income-tax Act, 1961. THE assessment year is 1980-81.

(2.) THE scheme that had been formulated by that company in its centenary year was one, which was directed at increasing the sales of its manufactured goods through its dealers, and to achieve that object provided incentives to dealers who exceeded the targets fixed under the scheme. THE relevant part of the scheme addressed to the dealers stated :

(3.) THE court, in the case of G. R. Karthiheyan , reiterated the observations that had been made by the apex court in the case of Navinchandra Mafatlal v. CIT [1954] 26 ITR 758, at page 764, that (p. 871) : " 'What, then, is the ordinary, natural and grammatical meaning of the word "income" ? According to the dictionary it means "a thing that comes in." (see Oxford Dictionary, Volume V, page 162 ; Stroud, Volume II, pages 14-16 ). In the United States of America and in Australia both of which also are English speaking countries the word "income" is understood in a wide sense so as to include a capital gain. Reference may be made to Eismr v. Macomber [1919] 252 US 189 ; Merchants' Loan and Trust Co. v. Smietanka [1920] 255 US 509 and United States of America v. Stewart (1940] 311 US 60 and Resch v. Federal Commissioner of Taxation [1943] 66 CLR 198. In each of these cases a very wide meaning was ascribed to the word "income" as its natural meaning. THE relevant observations of the learned judges deciding those cases which have been quoted in the judgment of Tendolkar J., quite clearly indicate that such wide meaning was put upon the word "income" not because of any particular legislative practice either in the United States or in the Commonwealth of Australia but because such was the normal concept and connotation of the ordinary English word "income". Its natural meaning embraces any profit or gain which is actually received. This is in consonance with the observations of Lord Wright to which reference has already been made.... THE argument founded on an assumed legislative practice being thus out of the way, there can be no difficulty in applying its natural and grammatical meaning to the ordinary English word "income". As already observed, the word should be given its widest connotation in view of the fact that it occurs in a legislative head conferring legislative power'."