1982 (9) TMI 148

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....e employed by a medical firm of which the managing partner Sri R.K. Swamy is the brother-in-law of the assessee. The assessee was being paid certain percentage of the turnover as remuneration. In this year his services were terminated, and he was paid Rs. 16,000 on that account. The assessee returned the income in this year as follows: Business Rs. Remuneration from M/s Prabhat Medical St....

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....e agreement dt. 1st Oct., 1973 entered into by the assessee and employer clearly showed that the assessee was not entitled to such compensation. 3. In appeal, it was in the alternative contended by the assessee that this Rs. 16,000 is a gift and hence a capital receipt. The AAC rejected the plea that it is gift. He held that the assessment of Rs. 16,000 as income of the assessee is well justifi....

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....nt received from M/s Prabhat Medical Stores towards service rendered was being assessed under the head 'business', the amount of Rs. 16,000 being purely a sum given by the said firm outside the agreement dt. 1st Oct., 1973, the said sum would be purely a capital receipt in the hands of the assessee, and the AAC who, it may be stated, is by definition, an Income Tax Authority with power of enhancem....

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....i V. Manoharan is th assessment son of Vaideeswaran and that apparently the inference is obvious. So according to the stand of the department this grant of Rs. 16,000 to the assessee is a gift. If so, it is not income of the assessee. What is income by way of gift is certainly not the income of the recipient. So Rs. 16,000 has to be excluded form assessment. 6. In any event, it may be exempt u/....