COMMISSIONER OF INCOME TAX Vs. RAJAMANICKAM S A

JUDGEMENT

(1.) THE reference has been sought at the instance of the Revenue under s. 256(1) of the I.T. Act, 1961, on the following question :

(2.) THE assessee was formerly on employee in the firm, M/S. Hasan Mohamed Rowther, on a monthly salary of Rs. 150. In 1943, he become a member of the Dravida Kazhakam and when that party was split he joined the Dravida Munnetra Kazhakam. Between 1949 and 1968, he had held various offices, viz., secretary of the taluk commitee and secrtary of the district committee. Because of increasing activity in the party, he left the job in M/S. Hasan Mohamed Rowther in 1968. He was also a municipal councillor for two terms in the meanwhile. THEn he became a Memebr of the Legislative Council on April 21, 1970.

(3.) ACCORDING to the assessing officer, as seen from the order of assessment, the assessee is one of the politicians in Coimbatore belonging to the ruling party in the State (then Dravida Munnetra Kazhakam Party). Under s. 28 of the I.T. Act, 1961, profits and gains of any business or profession shall be chargeable to income-tax under s. 2(36) of the Act. "Profession" includes vocation and in the case of P. V. G. Raju v. Commissioner of Expenditure-tax [1971] 79 ITR 430, the Andhra Pradesh High Court has expressed that politics could be one's own profession and any expenditure incurred for his own election as well as the election as well as the election of the candidates set up by such person was "expenditure" incurred wholly and exclusively for the purpose of the occupation carried on by such person. On the above view, he held that the assessee has adopted politics as his career and, therefore, politics is his vacation or occupation that since the assessee has not proved that Rs. 51,000 represents the gate collections for the drama, which was arranged by the assessee to entertain the donors, the above-said money must have been received by viture of his profession as a politician. But the assessing officer has not based his conclusion on any material to indicate that Rs 51,000 was received by the assessee as remuneration or return for the political service rendered by him to the Dravida Munnetra Kazhakam party and has not mentioned the exact source of money that was paid to the assessee. In the Andhra Pradesh High Court case, relied on by the assessing officer, it was the admitted fact that the expenditure was incurred by the assessee for the purpose of his own election and the election of his partymen. But in this proceeding, we are not concerned with any expenditure and the impugned amount did not belong to any specific individual, but the same is the result of the collections from the general public, former employer of the assessee, members of other parties, collections from dramatic performances and from the partymen of the assessee. The learned counsel has cited several judicial decisions in support of his argument that the impugned amount is not the income of the assessee received in the course of his profession or vocation.