C RAJAGOPALACHARIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under the Indian Income-tax Act and the question referred for decision is whether on the facts and in the circumstances of this case the sum of Rs. 5, 605 is taxable. The petitioner claims that this amount is exempt from taxation under section 4(3)(vii) of the Income Tax Act, 1922 which reads as follows

(2.) THE petitioner was a distinguished and successful lawyer and is an active politician. He held high offices in the Government of this country as Governor-General of India, Governor of a State, Minister in the Union Government and Chief Minister of Madras State. He has all along been an author of books and a writer of great repute. His books and writings are widely read not merely in this country but throughout the globe In his return of income under the Indian Income-tax Act for the assessment year 1956-57, he showed the following receipts Rs Kalki for the year 1953-54-55 ... 5, 000 Kannan, Kalaimagal ... 50 Hindustan Times, New Delhi ... 75 All India Radio ... 480 Total : 5, 605

(3.) WE may mention even at the very outset that the reasoning adopted by the Tribunal in arriving at the conclusion regarding the taxability of the receipt in the hands of the assessee is fault and illogical. But the question still remains whether on the admitted facts and circumstances of the case, the receipt is taxable or not The language of the enactment already set out above is certainly not abstruse but can be said to be fairly clear. A receipt is non-taxable under that provision, if it satisfies the following conditions : 1. It should not be capital gains chargeable under section 12B of the Act. 2. It should not arise from business or the exercise of a profession, vocation or occupation. 3. It should be of a casual and non-recurring nature. 4. It should not be by way of addition to the remuneration of an employee. Unless all these conditions are satisfied the exemption under that provision cannot be invoked. So far as this case is concerned, there can be no difficulty in holding that the receipt did not arise from any business or profession, that it was not a capital gain under section 12B of the Act, and that it was not by way of addition to the remuneration of an employee.