Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 229 - HC - Income TaxReceipt of an award from B. D. Goenka Foundation - whether was taxable as assessee's income as the said institution was not covered by section 10(17A)? - Held that:- The causa causans in the present case is not directly relatable to the carrying on of vocation as a journalist or as a publisher. It is directly connected and linked with the personal achievements and personality of the person i.e. the appellant. Further, it is to be noted that the payment in this case was not of a periodical or repetitive nature. The payment was also not made by an employer; or by a person associated with the “vocation” being carried on by the appellant; or by a client of his. The prize money has in the instant case been paid by a third person, who was not concerned with the activities or associated with the “vocation” of the appellant. It being a payment of a personal nature, it should be treated as capital payment, being akin to or like a gift, which does not have any element of quid pro quo. The aforesaid prize money was paid to the assessee on a voluntary basis and was purely gratis. The correct legal position is that Section 10 exclusively deals with the exempt income not exigible to tax and should not per se be relied upon to ascertain whether the receipt would be a revenue receipt i.e. income chargeable to tax under sub-section (24) to Section 2 read with the charging provisions. The question of exemption under Section 10 would only arise if at the first instance, the receipt is found to be a revenue receipt. It would be incorrect to first examine whether a particular receipt has been exempted and then on the said reasoning and ratio proceed to decipher and hold that the amount/receipt is income for the purposes of the Act i.e. the Income Tax Act. In International Instruments vs. CIT, (1981 (3) TMI 59 - KARNATAKA High Court) it has been held that “A receipt may not be "income" at all within the proper connotation of that term and yet may come within the express exemption in this section, due to the over- anxiety of the draftsman to make the fact of non- taxability clear beyond possibility of doubt.” Just because a certain receipt is not exempt under Section 10, it doesn't follow that it is a revenue receipt and hence income. In G.R. Karthikeyan (1993 (4) TMI 9 - SUPREME Court), the Supreme Court has made an observation that when a particular “income” or “receipt” is exempt to a limited extent, it may be a relevant factor for determining the meaning of the expression “income”. However, this statement should not be read in isolation, bereft of the context in which it was made. This clearly illustrates that the main thrust there was on highlighting that the term "income" is of widest amplitude and should be given a natural and grammatical meaning. Casual "income" is income. Once, it is settled, that the receipt is income, partial exemption would necessarily indicate that the non- exempt part is taxable. ₹ 1 lakh received by the appellant- assessee as an award from B.D. Goenka Trust for Excellence in Journalism would be a capital receipt and hence not income taxable under the Act, i.e. Income Tax Act, 1961. - Decided in favour of assessee.
|