COMMISSIONER OF INCOME TAX Vs. JNAN PRAKASH GHOSH

JUDGEMENT

(1.) The Tribunal has referred the following question of law to this court under Section 256(1) of the Income-tax Act, 1961 ("the Act") :

(2.) The assessee is an individual deriving income from profession as a musician. He has also income from house property. During the assessment year under consideration (assessment year 1977-78, corresponding to accounting year ending on March 31, 1977), the assessee received a sum of Rs. 72,925 in foreign currency as remuneration for services rendered to the Ali Akbar College of Music in America under an agreement dated July 10, 1976, entered into by and between the assessee and the Ali Akbar College of Music, America. The said agreement was for only one year. The assessee claimed that this amount should be treated as professional income and the expenses incurred for earning this income should be allowed. The Income-tax Officer did not agree with the contention of the assessee and held that the assessee was an employee of the Ali Akbar College of Music. Accordingly, the income should come under the head "Salaries". On appeal, the Appellate Assistant Commissioner held that the amount was liable to be taxed under Section 5(1)(c) of the Act, and the provisions of Section 6(1)(ii) (sic) of the Act could not be invoked for treating the said income as income under the head "Salaries". The Appellate Assistant Commissioner directed the Income-tax Officer to allow the incidental expenses connected with the remuneration earned.

(3.) On further appeal, the Tribunal examined the agreement and came to the conclusion that the engagement of the assessee was essentially in the nature of a professional engagement. The agreement did not establish any relationship of master and servant between the college and the assessee and the assessee was a professional man and the agreement was for a short period of one year only. Reliance was also placed by the Tribunal in the case of CIT v. Mrs. Durga Khote [1952] 21 ITR 22 (Bom), and the Tribunal came to the conclusion that the assessee's income should be treated as professional income and the deduction claimed by the assessee was allowable.