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TMI Blog1978 (3) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to lease to be granted by it to members desiring to purchase the houses are set out in pages 23 and 24 of the compilation filed by the assessee. A member making an application for a house under these regulations shall hold not less than five fully paid up shares in the society. Regulation 4 provides the terms of the lease shall be one year less than the term of interest held by the society but not exceeding 998 years. According to article 6 of the regulations, a member shall not assign, underlet or part with the possession but article 6A provides that on every permitted disposition or devolution of or dealing with the said plot and buildings or any part thereof under or by virtue of the regulations the member shall pay to the society, half the premium received by him from the purchaser member in respect of the said plot and shall also pay to the society, in the case of the said plot and building, half of the amount received by him over and above the capital cost with interest at 5 1/2 per cent per annum up to a limit of one-third of the capital cost and such payments received by the society are to belong to the society absolutely. 2. In the previous years relevant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the assessee that the nature of the receipt in the hands of the assessee-society in regard to the amount of 50 per cent of the premium or consideration for the transfer by the member to outsider being the same and bearing the same character as the nature of the receipt by the member, and as in the hands of the member it can only constitute a capital receipt, the amount in the hands of the assessee also constitutes at best capital receipt. 5. The learned departmental representative supported the case of the department for taxing the concerned receipts by the society either as assessable under the head 'Income from other sources' or alternatively, as chargeable to income-tax under the head 'Profits and gains of business or profession' under section 28(3) as income derived by the society from specific services performed for its members. In the course of hearing be referred to the decisions in Lakshminarayan Ram Gopal Son Ltd. v. Government of Hyderabad [1954] 25 ITR 449 at page 459 wherein the question as to what activities constitute carrying on business had been discussed CIT v. Maharani, Shri Kesarkunwerba Saheb of Morvi [1958] 33 ITR 349, wherein it is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no evidence of any business being carried on by the assessee-society. He also referred in this connection to the observations as to the nature of leasehold interest in the decision of the Supreme Court in P. N. Sikand. 7. Having carefully considered the contentions of the rival parties on the dispute raised before us in these appeals, we find ourselves unable to accept or appreciate the submission of the learned counsel for the assessee that the amounts concerned cannot be treated as a revenue receipt in the hands of the assessee. He did not reiterate the claim of the assessee before us which was advanced before the departmental authorities that the receipts are of a casual nature. All that he submitted was that the receipts bear the same character or nature as the receipts by the tenants or members from the transferees as it arose to the assessee under an agreement to share the surplus receipts and since the receipts in the hands of the member could only be a capital receipt at best amounting to capital gains not taxable as it did not involve transfer of an asset which had a cost in the hands of the assessee, it cannot bear the character of revenue receipt in the appellant's h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The concept of income for the purpose of income-tax is very wide and according to its definition in section 2(24) it is an inclusive definition and not an exhaustive one. It includes not only those things which the clause declares that it shall include but also such things, as the word signifies according to its natural import. The word 'income' has baffled an exact and clear-cut definition thereof and in spite of several attempts in a large number of decisions in laying down such a definition, they have not closed the controversy. After referring to some of these cases in this connection and noting an important amplification to the definition stated in CIT v. Shaw Wallace Co. 6 ITC 178 (PC), followed in Maharaj Kumar Gopal Saran Narain Singh v. CIT [1953] 3 ITR 237 (PC), added by Lord Russell of Killowen "that anything which can properly be described as income, is taxable under the Act unless expressly exempted", the learned authors Kanga and Palkhivala on page 90 of their Commentary on Income-tax, 7th Edn., Vol. 1, sum up the position thus : "The categories of income are never closed. It would be impossible to define income precisely without excluding some species of it. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be regarded as having an origin in what might be called the real source of income. On the facts found in the present case, we have no hesitation in coming to the conclusion that the payments are referable to the real source of income. The payments in this case were not voluntary or ex gratia payments and did not depend on the whims and caprices of the members and the assessee could legally enforce its right to get 50 per cent of the premium from its members on transfer of their plots. It is, therefore, not necessary that the assessee should have carried on any activity which constituted business in order to bring to tax these amounts." We are in respectful agreement with this observation of the earlier Bench. 10. It is unnecessary for us to examine elaborately the decisions cited by the parties. The case of the Supreme Court in P. N. Sikand referred to by the learned counsel for the assessee, merely dealt with the case of an overriding title to the 50 per cent of the unearned increase payable to the lessor under the lease which was held to be diverted at source. It is not relevant for the purpose of deciding the question before us nor is it an authority for the proposition ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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