1990 (3) TMI 57

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....obtain certification in Internal Medicine, was that a candidate had to do internship in a hospital for a prescribed period. Accordingly, the assessee worked in and completed internship at the Worcester City Hospital from June, 1973, to June, 1974. It also appears that the assessee worked there for two more years. During the accounting period ending March 31, 1974, relevant for the assessment year 1974-75, the assessee had admittedly received 7,086.82, and, in the course of the assessment proceedings, the assessee claimed that the amount received from the hospital was in the nature of a stipend paid to meet the expenses in connection with the post-graduate studies and hence exempt under section 10(16) of the Income-tax Act, 1961 (hereinafter....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....scholarship. On the dismissal of the appeal by the Tribunal, at the instance of the assessee, under section 256(1) of the Act, the following two questions of law have been referred to this court for its opinion : "(1) Whether the sum of 7,086.82 (equivalent to Rs. 50,320) received by the assessee in the course of internship in the Worcester City Hospital is income of the assessee within the meaning of the Income-tax Act, 1961 ? (2) If it is income, whether it is a scholarship granted to the assessee to meet his cost of education within the meaning of section 10(16) of the Income-tax Act, 1961 ?" Learned counsel for the assessee, strongly relying upon the decisions reported in A. Ratnakar Rao v. Addl. CIT [1981] 128 ITR 527 (Kar) an....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... bear the character of income, there was no need whatever for a specific exclusion. The proper View to take on section 10(16) of the Act would be that a scholarship, even though income in the hands of the scholar-recipient, would not be included in the taxable total income, if it was a scholarship granted to meet the cost of education. Bearing this in mind, when we examine the precise nature of the payments received by the assessee, it is seen from annexure E styled as statement of earnings that the assessee has been shown to have been paid pay or salary. It has also been differently described as wages. The Federal and State taxes had been deducted from the payments so made. It may be that in order to fulfil one of the requirements of the B....