Professional income vs salary: Advocate-General court appearance fees were treated as legal profession receipts, not salary.

Remuneration paid to an Advocate-General for court appearances was treated as professional income rather than salary because chargeability under the head salary depends on an employer-employee relationship and the payer's right to control the manner of performance. The office of Advocate-General is constitutional and statutory, and its functions are performed with substantial independence, so the Government's payment for legal appearances did not acquire the character of salary merely by being paid by the State. Monthly emoluments attached to the office could be considered separately, but fees for conducting cases remained assessable as income from business or profession, with the related deductions allowable.

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Issues: Whether remuneration received by the Advocate-General for appearances in court was assessable as salary under the Income-tax Act, 1961 or as professional income under the head income from business or profession.

Analysis: Chargeability under the head salary requires an employer-employee relationship. The controlling test is the existence of a right in the payer to direct not merely what work is to be done, but the manner in which it is to be done, together with corresponding powers of supervision and control. The office of Advocate-General is constitutional in character, carries statutory duties, and is discharged with substantial independence; the Government cannot control the manner in which those duties are performed. The remuneration paid for appearances in court was for professional services rendered in the course of practising law, and the engagement was only incidental to the assessee's profession. The monthly emoluments attached to the office could be treated separately, but the fees for conducting cases did not acquire the character of salary merely because they were paid by the State.

Conclusion: The remuneration for court appearances was assessable as professional income and not as salary, and the deductions claimed were allowable.

Final Conclusion: The departmental appeals failed, and the assessee's treatment of the receipts as professional income was upheld.

Ratio Decidendi: Where a professional person is engaged for legal work without the payer's right of control over the manner of performance, the resulting receipts are professional income and not salary.

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