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2008 (2) TMI 651 - AT - Income TaxNature of income - Gifts received on his 80th birthday made by the followers - without being under any contractual or legal or customary obligations - benefit or perquisite arising out of exercise of business or profession u/s 28(iv) - assessee submitted that, prior to this in assessment year 1975-76 similar gifts were received and which were held as exempt by the Department in the hands of the assessee - HELD THAT:- In the present case there is no intention of circumvention of income on the part of assessee or receiving income in other forms, hence, provisions of section 28(iv) of the Act cannot be applied. We would further like to add that the term ‘perquisite’ as per Blacks Law Dictionary means "privilege or benefit given in addition to one salary or regular wages" which means that it is an additional benefit and not a complete substitution of one’s income. As stated earlier that assessee has never charged any consideration from his followers, hence, on the basis of above meaning it cannot be termed as ‘benefit’ or ‘perquisite’ within the meaning of section 28(iv) of the Act. There is one more reason which we would like to specifically mention i.e., that the assessee has taken gift earlier only once and that too some 25 years back and at that time, the department has not charged the same to tax in completing the assessment proceedings under section 143(3) of the Act and during those assessment proceedings, the then followers who made the gifts clearly stated that those gifts had been given out of personal regard and respect to the qualities of the assessee. In this year also, the same is the position and the Revenue has not brought on record any material to prove otherwise. Thus, we hold that these gifts are not of the nature of any benefit or perquisite as contemplated under section 28(iv) of the Act. Accordingly, we delete the addition made by the Assessing Officer. In the result, appeal filed by the assessee stands allowed.
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