9911796707
TMI Blog1937 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. The applicant was employed by Syed Jawad Ali Shah as the manager of the Mian Sahib of Imambara Estate in the Gorakpur district on a salary of ₹ 400 a month. Syed Jawad Ali Shah established a sugar factory on this estate. He afterwards decided to transfer the factory to a limited company. The Pipraich Sugar Factory Ltd., was established in order to take over the concern. The applicant took a great deal of trouble in disposing of the shares of the company, i.e., in inducing a number of people to invest their capital in the company. After the company had been successfully floated, the Directors, in recognition of the applicants services, allotted to him shares to the value of ₹ 15,000. The applicant had been assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had to trust to the good sense of the directors. It seems to us that the learned Assistant Commissioner intended to find that there was no definite contract which could be enforced and therefore in that sense the payment was a matter of grace on the part of the directors, but that question is of no importance because we have to deal with the question of law which has been stated and the Income Tax Commissioner has asked for our opinion upon the assumption that the payment on the part of the directors was voluntary and without any previous agreement or understanding. Learned Counsel for the Income Tax Department has also argued that the reference really raises two independent questions of law, viz., (1) whether this allotment of shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of doubt. They cannot construe it as enlarging the word income so as to include receipts of any kind which are not specially exempted. The result is that a receipt may not be income within the proper connotation of that term and yet may come within the exceptions in Sec. 4(3) of the Act. We must decide whether this allotment of shares is income assessable under the Act after considering all the circumstances and applying not only the ordinary meaning of the word income but also the terms of the relevant part of Sec. 4(3) of the Act. Their Lordships in the case to which we have referred pointed out that the word income was not defined anywhere in the Act. They said :- Income, their Lordships think, in this Act connotes a periodic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. He may have been actuated by a desire merely to assist his employer in disposing of the Factory hoping thereby to secure his employers goodwill and gratitude. We do not think that the applicants activities can be described as business which is stated in the Act to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. We think that business must be some activity which has for its object the acquirement of some profit which can be claimed as of legal right. The receipt of the shares in this case was certainly in the nature of a windfall. The receipt was certainly casual in its nature. There was no expectation of returns which would come in with any sort of regularity. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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