One-off mining receipt and reference fee treatment clarified: casual payment not taxable, fee refundable as costs of reference.

A one-off receipt under a private mining arrangement was not taxable as business profits because the recipient acquired no proprietary interest in the property and was not carrying on a business of dealing in mines or concessions; it was also outside income from other sources because it was casual and non-recurring. The fee deposited with an application for reference under the statutory reference procedure was treated as part of the costs of the reference and was refundable in the Court's discretion, consistent with the practice adopted by High Courts.

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Issues: (i) Whether the sum of 6,000 received under the mining agreement constituted taxable income as profits and gains of business or as income from other sources; (ii) Whether the fee of Rs. 100 deposited with an application for reference under section 66(2) was refundable as part of the costs of the reference.

Issue (i): Whether the sum of 6,000 received under the mining agreement constituted taxable income as profits and gains of business or as income from other sources.

Analysis: The receipt arose from a private arrangement by which money was advanced to secure repayment out of any sale proceeds of the mining property. The assessee acquired no interest in the property itself and the transaction was not part of any business of buying or selling mines or mining concessions. The receipt was therefore not business profit, nor was it income from other sources within the charging provisions relied on, being a casual and non-recurring receipt.

Conclusion: The sum of 6,000 was not taxable income.

Issue (ii): Whether the fee of Rs. 100 deposited with an application for reference under section 66(2) was refundable as part of the costs of the reference.

Analysis: The statutory scheme treated the application fee as an amount accompanying the reference procedure, and the costs of a reference made on the assessee's application were left to the discretion of the Court. Uniform practice among the High Courts supported treating the deposit as part of the costs incidental to the reference, capable of refund in a proper case.

Conclusion: The fee of Rs. 100 was refundable in the Court's discretion as part of the costs of the reference.

Final Conclusion: The reference was answered against the revenue on the taxability issue, and the assessee was also granted refund of the reference fee with costs.

Ratio Decidendi: A one-off receipt arising from a private loan-cum-sale arrangement, where no proprietary interest in the asset is acquired and no business of dealing in such property is shown, is not taxable as business profits or as income from other sources if it is casual and non-recurring; a reference fee paid under the statutory procedure may form part of the costs of the reference.

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