Brokerage income treated as business income where no special qualification or professional learning was shown.

Brokerage income carried on under agency arrangements was held to be business income, not professional income, because the correct test is not merely personal exertion or absence of capital but whether the activity is backed by special qualification or learning beyond ordinary skill. As no finding of such special qualification was recorded, the income was assessable as business income and the reference was answered in favour of the Revenue.

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Issues: Whether brokerage income amounts to professional income or business income for the purpose of assessment.

Analysis: The Tribunal had treated brokerage as professional income on the footing that it involved personal exertion and no monetary investment. The Court held that this was not the correct test. Brokerage activities carried on under agency arrangements amount to business, and the character of profession requires not merely skill or effort but some special qualification or learning beyond ordinary skill. No such finding of special qualification was recorded.

Conclusion: Brokerage income is business income and not professional income; the reference is answered in favour of the Revenue and against the assessee.

Ratio Decidendi: Income from brokerage is assessable as business income unless it is shown that the activity is carried on with the aid of special qualification or learning so as to amount to a profession.

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