Voluntary payment for professional services held taxable because it arose from the exercise of the recipient's profession.

A voluntary payment made to an advocate was held taxable because its real source was professional services rendered in connection with a shareholders' meeting and related difficulties. The fact that the payers were under no legal obligation to pay, and that the receipt was described as casual and non-recurring, did not alter its character where it accrued by reason of a specific professional act. The receipt was therefore treated as arising from the exercise of the recipient's profession and was not exempt under Section 4(3)(vii) of the Income-tax Act, 1922.

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Issues: Whether the sum of Rs. 10,000 received by an advocate was exempt from income-tax as a casual and non-recurring receipt not arising from the exercise of his profession.

Analysis: The receipt was treated as casual and non-recurring, but the decisive question was its source. The payment was made because of the professional assistance rendered in connection with the shareholders' meeting and the successful handling of the shareholders' difficulties. A receipt need not arise under a contract of employment to be taxable if, in substance, it accrues by reason of professional services. The fact that the payers were under no legal obligation to make the payment did not change its character, since the payment was directly connected with a specific professional act and not with the recipient's personal qualities generally.

Conclusion: The sum of Rs. 10,000 was a taxable receipt arising from the exercise of the recipient's profession and was not exempt under Section 4(3)(vii) of the Income-tax Act, 1922.

Final Conclusion: The reference was answered against the assessee and the amount was held assessable to income-tax.

Ratio Decidendi: A voluntary payment is taxable where it is received by reason of a specific professional service and constitutes a receipt arising from the exercise of the recipient's profession, even though there is no legal obligation to pay.

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