1968 (9) TMI 35 - HC - Income Tax

Assessee s wife, a social worker associated with various organisations engaged in social welfare had incurred expenditure for attending some meetings of these institutions - assessee s wife had dedicated her life to such social work and hence the same amounted to occupation and expenditure incurred for attending the meetings is not taxable expenditure of the assessee

Summary

Issues Involved:
1. Whether the activities of the assessee's wife amounted to a vocation or occupation within the meaning of section 5(a) of the Expenditure-tax Act, 1957.
2. Whether the assessee was entitled to claim exemption under section 5(a) of the Act in respect of the expenditure incurred by his wife for her vocation or occupation.

Issue-wise Detailed Analysis:

1. Whether the activities of the assessee's wife amounted to a vocation or occupation within the meaning of section 5(a) of the Expenditure-tax Act, 1957:

The primary issue addressed was whether the activities of the assessee's wife could be classified as a vocation or occupation under section 5(a) of the Expenditure-tax Act, 1957. The assessee's wife was involved in social welfare activities, associating with twenty-four institutions and organizations. She incurred an expenditure of Rs. 5,182 for attending meetings of four institutions outside Ahmedabad. The Expenditure-tax Officer and the Appellate Assistant Commissioner both rejected the claim for exemption, asserting that the activities lacked a profit-making motive and thus could not be considered a vocation or occupation.

However, the Tribunal reversed this decision, stating that a profit-making motive was not necessary for an activity to be classified as a vocation or occupation. The Tribunal emphasized that the assessee's wife was dedicated to social work, and her activities should be considered a vocation or occupation. The Tribunal also dismissed the revenue's argument that only expenditure incurred by the assessee himself could be exempt under section 5(a).

The court, referring to the Supreme Court's decision in P. Krishna Menon v. Commissioner of Income-tax, held that the absence of a profit-making motive does not exclude an activity from being classified as a vocation or occupation. The court also noted the broader legislative intent behind the term "occupation" in section 5(a), which was meant to encompass a wide range of non-personal expenditures.

The court further elaborated on the meaning of "occupation," citing Corpus Juris Secundum, and concluded that the activities of the assessee's wife, which occupied her time and attention with a degree of continuity and regularity, constituted an "occupation" within the meaning of section 5(a). Therefore, the Tribunal was justified in holding that the activities of the assessee's wife amounted to an occupation.

2. Whether the assessee was entitled to claim exemption under section 5(a) of the Act in respect of the expenditure incurred by his wife for her vocation or occupation:

The second question was not pressed by the revenue and thus was not addressed by the court. The focus remained solely on the first issue.

Conclusion:

The court concluded that the activities of the assessee's wife amounted to an "occupation" within the meaning of section 5(a) of the Expenditure-tax Act, 1957. Consequently, the Tribunal's decision to grant the exemption was upheld. The Commissioner was directed to pay the costs of the reference to the assessee.