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TMI Blog1983 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 970. Some time in 1970-71 an ad hoc committee was formed by his partymen to present him a purse in order to enable him to purchase a house drama also was performed as one of the means of collection of donations. The partymen and the assessee had collected donations from the members of the party, businessmen and members of the public. The former employer, M/s. S. Hasan Mohamed Rowther, also donated Rs. 5,000 on January 21, 1970, and the then Chief Minister of Madras presented a purse containing Rs. 56,000 to the assessee. The assessee handed over the said amount to the committee with a request to purchase a house for him with the said fund. Accordingly, a house was purchased for Rs. 72,000 at Coimbatore which gave rise to the assessment proceedings. After receipt of a notice from the assessing officer, the assessee filed return on January 16, 1974, disclosing an income of Rs. 15,000 and explained that Rs. 5,000 had been received from his former employer towards gratuity, that Rs. 16,000 represented his own savings during the earlier years and that Rs. 51,000 was the amount given to him by his admirers on January 21, 1970. The assessing officer excluded Rs. 21,000 from the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. "Profession" includes vocation and in the case of P. V. G. Raja v. Commissioner of Expenditure-tax [1971] 79 ITR 430, the Andhra Pradesh High Court has expressed that politics could be one's own profession and any expenditure incurred for his own election as well as the election of the candidates set up by such person was " expenditure" incurred wholly and exclusively for the purpose of the occupation carried on by such person. On the above view, he held that the assessee has adopted politics as his career and, therefore, politics is his vocation or occupation and that since the assessee has not Proved that Rs. 51,000 represents the gate collections for the drama, which was arranged by the assessee to entertain the donors, the above-said money must have been received by virtue of his profession as a politician. But the assessing officer has not based his conclusion on any material to indicate that Rs. 51,000 was received by the assessee as remuneration or return for the political service rendered by him to the Dravida Munnetra Kazhakam party and has not mentioned the exact source of money that was paid to the assessee. In the Andhra Pradesh High Court case, relied on by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. The decision of the Bombay High Court directly applies on all fours to the facts of the present case. In this case, it is admitted by the assessing officer that the impugned amount was paid to the assessee in appreciation of the (services of the) assessee when he was a member of Dravida Munnetra Kazhakam Party. The mere circumstance that the assessee is a member of the Dravida Munnetra Kazhakam party cannot lead to the presumption, without any evidence or material, that the impugned amount constituted income from other sources. The assessing officer has not ventured to collect any evidence or material to prove that the impugned amount formed the income of the assessee from other sources. The contention of the assessee is that the amount was paid only as personal gift and not as remuneration for services rendered by him as member of the Dravida Munnetra Kazhakam party. The assessee has not only been a member of the Dravida Munnetra Kazhakam, but he subsequently became a Member of the taluk committee, town committee, district committee, etc., in the Coimbatore District and he was also a M.L.C. and a member of the municipal council for two terms. That is why the general public ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t disputed that the Department has not collected any material or evidence to substantiate the contention that the amount was paid as remuneration for the services rendered by the assessee to the political party to which he was attached or that the amount represented the payment for any services, particular or special, rendered by the assessee to any political party or any other association or individual. It is not as though there is any entry in the accounts of any party regarding the collections made and presentations offered to the assessee to prove any nexus between the alleged services rendered by the assessee and the payment made to the assessee. Thus, the Department has failed to collect any material or evidence to prove that the amount presented to the assessee by the then Chief Minister of Tamil Nadu is not a gift or windfall for the personal qualities of the assessee. Of course, politics had been held to be a profession or vocation by the Supreme Court in Commr. of Expenditure-tax v. P. V. G. Raju [1975] 101 ITR 465 (SC), within the meaning of s. 5(j) of the Expenditure-tax Act, 1958. In that case, the Supreme Court has held that the amounts expended by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lancashire playing for a few brief seasons, and receiving small sums by way of collections, should be liable to tax. " In the penultimate paragraph, the following observations have been made (p. 109) : " ...to say that the collections were voluntary payments made by the cricketing public on grounds which were purely personal to Mr. Dooland because he was well liked and because of his cricketing skill, and were not a profit accruing to him by virtue of his employment. In my opinion, however, this case is concluded by the special facts, the chief and decisive fact being the contract of employment which had provided for these very collections to be made to him in the circumstances which arose in this case. " It is in the above case that five tests have been prescribed for ascertaining whether the voluntary presents made to an assessee will amount to gift or only a remuneration for service. Thus, in the above case, because of some special facts, the chief and decisive fact being the contract of employment which had provided for the very collections to be made and presented to Mr. Dooland, the professional cricketer in Lancashire playing for a few brief seasons, the receiving of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of books and contributing articles to periodicals and magazines constituted a vocation and as the amounts arose from a vocation they were not exempt under s. 4(3)(vii). But that is not the subject-matter in the present case, since the payment has been made only in appreciation of the personal qualities of the assessee. The assessee has not written any article or any such thing to any magazine or rendered any service in return for any remuneration so far as the amount of Rs. 51,000 is concerned. Therefore, that case can be clearly distinguished from the case before us. At p. 238 in vol. 17th Edn. of Kanga and Palkhivala's, The Law and Practice of Income-tax, the authors have expressed the following view : " But a receipt does not necessarily arise from the exercise of a profession or vocation merely because the profession or vocation affords the opportunity for earning the receipt. A golden handshake given as a gift by a company to its auditors whose appointment was not renewed was held not to be a professional receipt. As against such preponderant materials and circumstances in favour of the assessee that the present of Rs. 51,000 to the assessee amounted to a windfall or gif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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