Casual share allotment for past services was not taxable income because it lacked regularity, legal entitlement, and a definite source.

Allotment of fully paid-up shares made voluntarily, without any prior agreement or legal entitlement, was treated as a casual and non-recurring receipt rather than income. The court applied the ordinary meaning of income as a periodic return from a definite source and found that the assessee had no contract for remuneration, was not engaged in any business of promoting companies or dealing in shares, and received the shares only through the directors' goodwill in gratitude for services rendered. On that basis, the receipt lacked the regularity and source characteristic of taxable income and was exempt from assessment under the Act.

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Issues: Whether the allotment of fully paid-up shares to the assessee, made voluntarily and without any prior agreement or understanding, constituted income assessable to tax or was a casual and non-recurring receipt exempt under the Act.

Analysis: The receipt had to be tested not merely by its form but by its true character under the ordinary meaning of income and the exemption provision. Income was treated as a periodical monetary return coming in with some regularity from a definite source, and not a mere windfall. The assessee had no legal claim to the shares, no contract for remuneration, and was not carrying on any business, profession, vocation, or occupation of promoting companies or dealing in shares. The allotment was made in gratitude for services rendered and depended on the directors' grace and goodwill. On those facts, the receipt lacked the element of regularity and definite return, and was casual in nature.

Conclusion: The allotment of shares did not amount to income assessable under the Act and was exempt from assessment.

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