AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (3) TMI 46
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....on the facts and circumstances of the case, the observation of the Tribunal that the same receipt is in the nature of income is correct or not? 3. Whether, on the facts and circumstances of the case, the said receipt of Rs. 30,000 is covered by the definition under section 2(24)(ix) of the Income-tax Act, 1961, or not and whether the same is taxable in the hands of the assessee or not?" The relevant facts in brief may be stated as follows: The assessee participated in the contest of Bombay Dyeing and Manufacturing Co. Ltd., Bombay, for caption writing by completing a sentence praising Bombay Dyeing fabrics in a few words and was adjudged for a prize and, accordingly, he got a prize of Rs. 30,000. The receipt of this amount was trea....
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.... the receipt of Rs. 30,000 in question is casual and non-recurring income and hence, this is not liable to tax under section 10(3) of the Income-tax Act. He placed reliance upon the following rulings: (i) CIT v. Magnum Export (P.) Ltd. [2003] 262 ITR 10 (Cal); (ii) Nalinikant Ambalal Mody v. S. A. L. Narayan Row, CIT [1966] 61 ITR 428 (SC); (iii) B. Malick v. CIT [1968] 67 ITR 616 (All); and (iv) CIT v. J. C. Wahal [1988] 170 ITR 635 (All). In the first case of Magnum Export (P.) Ltd. [2003] 262 ITR 10 (Cal), the court held: "Section 10(3) is an exception exempting specified receipts while computing total income. The receipt, which is casual or non-recurring in nature, can be brought under section 10(3) provided it does no....
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....chargeable to tax. Nor could the receipts be brought to tax under section 12 as 'income from other sources'. As the heads of income were mutually exclusive and the receipts could be brought under the fourth head, they could not be brought under the residual head 'Income from other sources'." In the third case of B. Malick [1968] 67 ITR 616 (All), the assessee while he was the Chief Justice of the Allahabad High Court was requested to act as an arbitrator in a certain matter though he expressed his unwillingness first but in view of certain intervention from high Governmental level, he agreed to act as such for which the fee of Rs. 20,000 was paid to him as a special case. In that eventuality the court held that, the amount of Rs. 20,000 ....
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....ping industries in the setting up of their factories, that this was the first occasion when the assessee rendered certain services to U, that there was no stipulation or understanding between the assessee and U regarding the payment of the commission, that the assessee had no legal claim against U in regard to the payment of commission which was made entirely ex gratia, based on no more than the grace of U extended to the assessee in recognition of his services rendered for assisting U in the sale of its shares as well as in the setting up of its factory, that the transaction was not an adventure in the nature of trade as no machinery was set up by the assessee for that purpose and that he was helping U single-handed under a moral obligatio....
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.... providing an important guiding factor is the absence of any contract, stipulation on understanding, obliging the giver to make the payment. In the case in hand, considering the aforesaid facts and circumstances of the case, we find ourselves in agreement with the view taken by the Tribunal since the receipt of Rs. 30,000 was a result of winning the caption contest held by Bombay Dyeing and Manufacturing Co. Ltd., being out of effort and skill of the assessee. There cannot be any two opinions about the fact that it was income within the definition under section 2(24)(ix) of the Act. We find that the payment of Rs. 30,000 was made to the assessee under the stipulated contract. It was not a payment in the absence of any contract or underst....