Casual and non-recurring receipt treatment excludes a third-party lump sum from income tax where no employment nexus exists.

A lump-sum gratuity-like payment received by a former employee from a third party after the employer's liquidation was treated as a mere windfall, not remuneration for services or a receipt arising from any subsisting employment. Because it lacked the character of a periodical return from a definite source, it was not assessable as income under the charging provisions relied on. The receipt also fell within the statutory exemption for casual and non-recurring receipts not arising from business, profession, vocation or occupation, and was therefore outside the charge to income tax.

---

---

Issues: Whether a lump sum gratuity-like payment received by a former employee from a third party, after the employer had gone into liquidation, was taxable as income or exempt as a casual and non-recurring receipt.

Analysis: The payment was not made by the employer, was not remuneration for services rendered, and did not arise from any subsisting employment relationship. It was held to be a mere windfall, not a periodical monetary return from a definite source, and therefore not assessable as income under the charging provisions relied upon by the revenue. The payment also fell within the statutory exemption for receipts of a casual and non-recurring nature not arising from business, profession, vocation or occupation.

Conclusion: The receipt was not taxable and was exempt from income tax; the answer to the reference was in the negative, in favour of the assessee.

Final Conclusion: The sum received by the assessee was held to be outside the charge to income tax and within the statutory exemption for casual and non-recurring receipts.

Ratio Decidendi: A spontaneous lump sum payment not arising from a subsisting employment or from a definite source of income, and lacking the character of periodical return, is a casual and non-recurring receipt and is not taxable as income.

---