TaxTMI 
TaxTMI 
1961 (12) TMI 98
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....ion 12B) and not being receipts arising from business or the exercise of a profession, vocation or occupation, which are of a casual and non-recurring nature, or are not by way of addition to the remuneration of an employee." The petitioner was a distinguished and successful lawyer and is an active politician. He held high offices in the Government of this country as Governor-General of India, Governor of a State, Minister in the Union Government and Chief Minister of Madras State. He has all along been an author of books and a writer of great repute. His books and writings are widely read not merely in this country but throughout the globe. In his return of income under the Indian Income-tax Act for the assessment year 1956-57, he sh....
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.... basis : "We may at once state that we reject the contention of the department that Kalki and others paid the assessee for services rendered to them. "Service", by its very concept, implies that there was an offer and an acceptance and a contract and none of these elements is present in this case. That it has not been a gift has been admitted by the assessee and it is also stated that the payment is for three years, at least in the case of Kalki. It is this 'time' element which, to our minds, has made this receipt a taxable income. It was also conceded that as the assessee began writing even in 1952, it seems to us difficult to hold that the receipt is of a casual nature. We, however, hold that the assessee is not a profess....
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....see arose out of any contract of employment between him and the Kalki or the Hindustan Times or the All India Radio. But, in our view, that by itself cannot enable the assessee to get out of the clutches of taxation invoking the aid of this special exemption provision. It seems to us to be clear that writing of books and contribution of articles to periodicals and magazines really constitute the vocation of the assessee. A vocation is only a way of living or a sphere of activity for which one has special fitness. It is not necessary that such activity should be one indulged in for earning a livelihood before it can be called "vocation." Nor can it be said that a person cannot have more than one vocation, A motive for making a profit is n....
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....rtainly taxable as income under the Income-tax Act. A judicial officer with musical attainments may delight the public by giving performances in the All India Radio and obtain payment. It can be said with the utmost propriety that music is a vocation of the officer and he obtained the payment in the exercise of such vocation. The essential test to be applied to determine the true nature of the receipt in cases of this description is, is it in the nature of a personal gift or is it remuneration ? An apparent gift, if it possesses an element of reward for service or work done, might assume the character of income. There is no doubt a distinction between reward for services and a recognition of service. In the former case the payment is a q....
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.... voluntarily made by the proprietor of the magazine in the year of account, so long as the payment was received by the assessee as remuneration for the articles subscribed by him, it cannot be deprived of its character as income by merely calling it a gift. The following observation of Sir Richard Collins M.R. in Herbert v. McQuade [1902] 2 KB 631, 649; 4 Tax Cas. 489 can be quoted : "Now that judgment, whether or not the particular facts justified it, is certainly an affirmation of a principle of law that a payment may be liable to income tax although it is voluntary on the part of the persons who made it, and that the test is whether, from the standpoint of the person who receives it, it accrues to him in virtue of his office ; i....
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.... on Boxing Day the huntsman did not receive many presents. The Court of Appeal held that the receipts of the huntsman by way of presents accrued to him by virtue of his employment and that they were assessable to income tax. At page 172, Jenkins L. J. observed thus : "As to the contention that the motives of the contributors of the voluntary payments should be looked at (or the objects, perhaps one should say, that they had in view), I agree that, generally speaking, where there is no definitely determining factor, like a reference in the contract of employment of the person concerned, it is hardly possible to assess the quality of the payment without considering the position both of the payer and of the payee, and it may well be t....