V MAHADEV Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee, a registered medical practitioner, who was employed in the medical department in the State of Tamil Nadu, resigned his job and proceeded to the United States of America for securing a qualification in Internal Medicine. He joined the medical school in the University of Massachussets and one of the requirements of the American Board of Internal Medicine, in order to obtain certification in Internal Medicine, was that a candidate had to do internship in a hospital for a prescribed period. Accordingly, the assessee worked in and completed internship at the Worcester City Hospital from June, 1973, to June, 1974. It also appears that the assessee worked there for two more years. During the accounting period ending March 31, 1974, relevant for the assessment year 1974-75, the assessee had admittedly received 7, 086.82, and, in the course of the assessment proceedings, the assessee claimed that the amount received from the hospital was in the nature of a stipend paid to meet the expenses in connection with the post-graduate studies and hence exempt under section 10(16) of the Income-tax Act, 1961 (hereinafter referred to as "the Act").

(2.) THE Income-tax Officer took the view that under section 5(1)(c) of the Act, any income accruing or arising to an assessee outside India during the previous year, was chargeable to tax and the purpose for which the income was received or was utilised would not change the character thereof and subjected to tax Rs. 50, 320 being the equivalent of $ 7, 086.82. Aggrieved by this, the assessee preferred an appeal to the Appellate Assistant Commissioner reiterating the contention that the amount received by him from the hospital was only a scholarship and exempt under section 10(16) of the Act. However, the Appellate Assistant Commissioner also concurred with the view taken by the Income-tax Officer and dismissed the appeal. On further appeal by the assessee to the Tribunal, it was contended that the amounts paid by the hospital and received by the assessee should be considered as scholarship and, therefore, should be excluded from the computation of the total income of the assessee under section 10(16) of the Act.

(3.) THAT decision has been rendered with reference to the purpose of the payment, as a scholarship amount, to pursue study and research in paediatrics. THAT decision cannot, therefore, be of any assistance in the present case. Likewise, in CIT v. V. K. Balachandran 1984 (147) ITR 4, 1985 (23) TAXMAN 29, 1984 (2) TLR 1028 (Mad), the amounts were paid to the assessee, who was, an "exchange visitor", in order to enable him to engage himself as a member in the school of mathematics for doing advanced research in the field of mathematics and to defray the expenses of his travel, study, etc., and it was under those circumstances that the grant-in-aid was held to be a scholarship to meet the assessee's education so as to fall under section 10(16) of the Act. Even that decision cannot have any application at all in the facts and circumstances of this case.