Grahapravesam gifts are not taxable business income unless linked to business or professional activity.

Presents received on the occasion of grahapravesam were examined by their real character and surrounding circumstances, not merely by the recipient's status as a businessman or money-lender. A voluntary payment is taxable only if it arises in the course of, or as a necessary incident of, the recipient's business or profession. Because the receipts were made on a social and family occasion and were not linked to business transactions, they were treated as non-taxable gifts rather than trading receipts.

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Issues: Whether presents received on the occasion of grahapravesam were income liable to tax in the assessee's hands.

Analysis: The receipts were examined by reference to their real character, not merely to the fact that the recipient was a businessman or money-lender. A gift or voluntary payment can be brought to tax only where it is shown to arise in the course of, or as a necessary incident of, the recipient's business or profession. The surrounding circumstances showed that the presents were made on a social and family occasion and were not linked to business transactions, despite some donors being borrowers of the assessee. Mere status as a money-lender did not convert all receipts of money into trading receipts.

Conclusion: The presents did not constitute income liable to tax and the answer was in favour of the assessee.

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