Taxable vocation receipts and source of income were determined by where the teaching activity was carried on, not by casual payment form.

Receipts received by a person engaged in teaching Vedanta were taxable because they arose from the exercise of a vocation or occupation, and therefore did not qualify as casual or non-recurring receipts. The court treated the teaching activity as the assessee's vocation and held that payments from disciples were income from that source. It also held that the deposits in the Bombay bank account did not prove accrual outside Travancore, because the vocation was carried on in Travancore except for occasional tours and there was no specific evidence of an outside source. The receipts were taxable and were attributed to Travancore source.

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Issues: (i) Whether receipts from a disciple constituted income taxable under the Travancore Income-tax Act, 1121. (ii) Whether the deposits in the assessee's Bombay bank account represented income that accrued to the assessee outside Travancore State.

Issue (i): Whether receipts from a disciple constituted income taxable under the Travancore Income-tax Act, 1121.

Analysis: The exemption for casual and non-recurring receipts did not apply where the receipts arose from the exercise of a profession, vocation or occupation. On the facts found, the assessee had devoted himself after retirement to teaching Vedanta philosophy, and that activity was his vocation or occupation. Payments made by disciples in connection with that activity were receipts arising from such vocation or occupation and were not exempt as casual gifts.

Conclusion: The receipts were taxable income and the question was answered in favour of Revenue.

Issue (ii): Whether the deposits in the assessee's Bombay bank account represented income that accrued to the assessee outside Travancore State.

Analysis: The assessee carried on his vocation or occupation in Travancore, save for occasional tours outside the State. The materials did not support a finding that the income from disciples accrued outside Travancore, and there was no specific evidence to justify a contrary conclusion.

Conclusion: The income was held to have arisen in Travancore, and the question was answered against the assessee.

Final Conclusion: The reference was answered on both questions in a manner sustaining taxation of the receipts and their attribution to Travancore source.

Ratio Decidendi: Receipts arising from a taxpayer's vocation or occupation do not fall within the exemption for casual and non-recurring receipts, and the territorial source of such income is determined by where that vocation or occupation is carried on.

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