Recurring offerings to a sect head were taxable income, not personal gifts, because they arose from office and customary obligation.

Receipts from disciples were treated as taxable income because they were recurring payments made with regularity due to the assessee's office as head of the sect, not voluntary transfers made out of purely personal regard. The court distinguished a personal gift as one given freely to the individual donee, whereas these sums arose from customary obligations attached to the position held. The receipts were characterised as revenue receipts, not capital receipts, and were held assessable as income from vocation under section 10 or, in any event, under section 12 of the Income-tax Act, 1922. They were therefore not exempt personal gifts.

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Issues: Whether the amounts received by the assessee from his disciples as offerings constituted taxable income, and whether such receipts were exempt as personal gifts.

Analysis: The receipts were held to be recurring payments made with regularity to the assessee because of the office he held as head of the sect and not because of any purely personal consideration. A personal gift must be voluntary and made out of regard for the individual donee, whereas these receipts arose from customary and obligations associated with the assessee's position. The Court treated the receipts as revenue receipts and not capital receipts, and held that they were assessable either as income from vocation under section 10 or, in any event, under section 12 of the Income-tax Act, 1922.

Conclusion: The sums were rightly assessed as taxable income and were not exempt personal gifts.

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