9911796707
TMI Blog1970 (2) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... was claiming a sum of Rs. 3,25,000 from Messrs. H. Fischer and Co. Pvt. Ltd. In respect of that claim certain correspondence was exchanged between Dandekar and the company and/or their respective legal advisers, between the end of May and about the beginning of July, 1956. In the course of that correspondence the company disputed the claim and Dandekar threatened to file a suit for recovering his claim. Mr. Vartak was the chairman of the company and one S. G. Pradhan was its managing director at the relevant time. The assessee, Mr. Ghanekar, is a chartered accountant and has been practising as such. He, Mr. Vartak and Pradhan were well acquainted with each other. He had some acquaintance with Dandekar also. The company was desirous of avoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assigned and transferred his said claim to the assessee for the said sum of Rs. 1,25,000. It has to be noticed that the assignment by the assessee is in favour of Mr. Vartak personally and not in favour of the company. Mr. Vrtak, however, was admittedly the chairman of the company at that time. The case appears to have proceeded on the footing that the assignment by the assessee in favour of Mr. Vartak was really in favour of the company, Mr. Vartak taking the assignment for and on behalf of the company. We will, therefore, proceed on the basis that the assignment by the assessee in favour of Mr. Vartak is an assignment in favour of the company itself. By reason of the transfer in his favour and his subsequent transfer to the company t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Assistant Commissioner before it, that the transaction was of a non-recurring nature, but that it was not casual and that it was not exempt from income-tax as contended by the assessee. The facts in this case are few and simple. As is usual in cases under section 4(3)(vii) it is the application of the law to the facts which presents difficulty. Now Mr. Mehta, the learned counsel for the assessee , has pointed out that the relevant facts are that the assessee was brought into this transaction not of his own seeking, but at the instance of the company because the assessee knew both the parties. He further pointed out that the assessee is practising as a chartered accountant and that this was not a transaction entered into by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as it is relevant to this case, this particular receipt of the assessee must be shown to be of a casual and non-recurring nature. There is no dispute, and the Tribunal has also held that this income is of a non-recurring nature. The only dispute is whether the income was casual. Now a judgment of Chagla C.J., delivered on behalf of a Division Bench of this court in Surat District Cotton Dealers' Association v. Commissioner of Income-tax lays down the test of casualness of a receipt to be " not merely that it must be of a non-recurring nature, but it must also be casual ", that is, that : " it is not anticipated or foreseen... Another test that might be applied with regard to an income being casual and non-recurring is that the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding Rs. 2,25,000. What was intended was a settlement between Dandekar and the company directly. Before the assessee commenced his work of negotiating with Dandekar, he already knew that the company was willing and had more or less decided to pay a sum not exceeding Rs. 2,25,000 by way of settling the claim of Dandekar. Although the assessee was requested to bring about only a settlement between Dandekar and the company directly, he obtained the assignment of the claim from Dandekar in his own favour and for a sum of Rs. 1,25,000, which was less by as large an amount as Rs. 1,00,000 than the maximum sum at which the company had expressed its willingness to settle the claim. Now, after he obtained that assignment, the position of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to him to his satisfaction. He was the legal owner of Dandekar's claim. He could file a suit or other litigation against the company. He knew, when he acquired this claim, that the company was reluctant to face a litigation and that because of that reason the company would be agreeable to settle the claim for an amount not exceeding Rs. 2,25,000. There was, therefore, nothing unanticipated in this receipt. It was a calculated move on the part of the see made with the intention of making a profit. What was unforeseen was only the exact quantum which he would earn in the transaction. For these reasons, we hold that the receipt of the sum of Rs. 85,000 by the assessee was not of a casual nature, although it was of a non-recurring nature. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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