1973 (7) TMI 4 - HC - Income Tax

Assessee Dilip Kumar Roy was a disciple of the late Shri Aurobindo. He utilised his talents given to him by the Divine for doing service for the Divine cause. His two main activities were singing bhajans and writing books - Some of his bhajans were recorded and he earned royalty from the same. He also earned royalty from the books. Both these receipts were charged to tax under the head other sources . He travelled widely not only in India but round the world and sometimes gave lectures on his tour. He attracted several persons towards him who called him their guru - The department did not produce any evidence to show that the amounts in question were assessee s income further conclusion recorded by the Tribunal by wrongly throwing the burden of proof on the assessee is not binding on the High Court

Issues Involved:
1. Whether the activities carried on by the assessee constituted a vocation within the meaning of section 10 of the Indian Income-tax Act, 1922.
2. Whether the amounts paid to the assessee by individuals were receipts arising out of a profession or vocation or were personal gifts.
3. Whether the amounts received by the assessee were impressed with the character of a trust.

Analysis of the Judgment:

1. Whether the activities carried on by the assessee constituted a vocation within the meaning of section 10 of the Indian Income-tax Act, 1922:
The court referred to the Supreme Court's decision in P. Krishna Menon v. Commissioner of Income-tax, which established that teaching is a vocation. However, the court did not decide whether the activities of the assessee constituted a vocation. Instead, it proceeded on the assumption that the activities did constitute a vocation for the purpose of addressing the subsequent contentions.

2. Whether the amounts paid to the assessee by individuals were receipts arising out of a profession or vocation or were personal gifts:
The court emphasized that only receipts arising out of profits or gains of business, profession, or vocation could be subjected to tax under section 10 of the Act. Personal gifts given out of esteem and veneration for personal qualities of the assessee are not taxable. The court cited several precedents, including Mahesh Anantrai Pattani v. Commissioner of Income-tax and Reed v. Seymour, to support this principle.

The court found that the major gifts from Richard Miller and Don Taxsy were given out of personal regard and veneration for the assessee, not as payments for services rendered. The affidavits of these donors, which were unchallenged, stated that the contributions were made for building a temple and were not connected to any professional services by the assessee. The court noted that the Tribunal had wrongly discarded this evidence and had not applied the correct legal principles.

3. Whether the amounts received by the assessee were impressed with the character of a trust:
Given the court's conclusion on the second issue, it found it unnecessary to address this contention. The court's finding that the amounts were personal gifts meant that they were not taxable, rendering the trust argument moot.

Conclusion:
The court answered the referred question in the negative, holding that the amounts deposited in the joint account were not liable to be assessed as income under the head 'business, profession or vocation.' The revenue was ordered to pay the costs of the assessee.

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