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Issues Involved:
1. Nature and character of the receipt of sums by the assessee. 2. Whether the sums received by the assessee constitute income assessable under the Indian Income-tax Act. Issue-wise Detailed Analysis: 1. Nature and Character of the Receipt of Sums by the Assessee: The primary issue for consideration was whether the sums received by the assessee were remuneration for services rendered or a personal gift. The assessee, an actress, was engaged to take the part of the heroine in a film produced by Sadhana Pictures. After the film's success, Ranganatha Dass, who had a half share in Sadhana Pictures, executed a document agreeing to pay the assessee a fourth of his share of the film's realizations. This agreement was characterized by the assessee as a personal gift, while the Income-tax authorities treated it as additional remuneration. The court examined the nature of the payment, considering whether it was intended as remuneration or a testimonial gift. It was noted that payments made voluntarily by an employer, even if not under a contractual obligation, could still be considered remuneration if they were intended to reward services rendered. The court referenced several precedents, including Reed v. Seymour and Bridges v. Bearsley, to illustrate the distinction between remuneration and personal gifts. The document executed by Ranganatha Dass explicitly stated that the payment was "special remuneration in addition to the fixed remuneration paid by the firm for her services as artist in the picture." This clear and unambiguous language indicated that the payment was intended as remuneration for the services rendered by the assessee. 2. Whether the Sums Received Constitute Income Assessable Under the Indian Income-tax Act: The court considered whether the sums of Rs. 63,258 and Rs. 10,362 received by the assessee during the years ended March 31, 1952, and March 31, 1953, respectively, constituted income assessable under the Indian Income-tax Act. The Income-tax Officer had included these amounts in the assessee's taxable income, a decision upheld by the Appellate Assistant Commissioner and the Appellate Tribunal. The court emphasized that the nature of the payment must be determined based on whether it was received by virtue of the assessee's employment. Payments received as remuneration for services, even if voluntary, are considered income. The court rejected the argument that the payment was a personal gift, noting that the document explicitly described it as additional remuneration. The court also addressed the argument that the payment was made by Ranganatha Dass, who was not the direct employer but a partner in the firm. It was held that the source of the payment did not alter its character as remuneration for services rendered. Conclusion: The court concluded that the sums received by the assessee were indeed additional remuneration for her services in the film and thus constituted income assessable under the Indian Income-tax Act. The terms of the document were decisive in determining the nature of the payment, and the alternative argument of a personal gift was not supported by the evidence. The question referred to the court was answered in the affirmative, and the assessee was ordered to pay the costs of the Department.
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