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TMI Blog1973 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... racted several persons towards him, who called him their guru. The assessee had a joint account in the name of himself and Smt. Indira Devi with the State Bank of India, Poona, in which the amounts received between the years 1954-55 to 1959-60 were deposited. The total deposits during all these years aggregated to Rs. 1,54,988. A major part of these deposits amounting to Rs. 96,442 was given by two American gentlemen by name Richard Miller and Don Taxsy. These amounts were utilised for construction of the property known as " India Milay Harikrishna Mandir " at Poona. As assessments for some of the years were completed, they were reopened under section 34 of the Act. The Income-tax Officer took the view that even assuming that the amounts received were voluntary payments from the various persons, from the standpoint of the assessee they were taxable receipts being received by virtue of his profession whether as a philosopher, writer, musician, or a spiritualist and they are his receipts from profession. On an appeal by the assessee before the Appellate Assistant Commissioner, the finding of the Income-tax Officer was reversed. He took the view that the receipts were not receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividuals were not receipts arising out of a profession or vocation, but the same were given as personal gifts to the assessee out of personal esteem and veneration for him and that the same were not income and were not liable to tax and, lastly, he contended that in any event the amounts were not received by the assessee as his personal income, but they were impressed with the character of a trust. In view of the decision of the Supreme Court in P. Krishna Menon v. Commissioner of Income-tax, it is settled law that teaching is a vocation, if not a profession and teaching Vedanta is just as much teaching as any other teaching, and, therefore, a vocation ; that, in order that an activity might be called a vocation, it is not necessary to show that it is an organised activity and that it is indulged in with a motive of making profit ; it is well established that it is not the motive of a person doing an act which decides whether the act done by him is the carrying on of a business, profession or vocation ; and if any business, profession or vocation in fact produced an income, that is taxable income, and is none the less so because it is carried on without the motive of producing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax. The head-note correctly sets out the facts and lays down the ratio of the decision as under: " The assessee acted as the Chief Dewan of the native State of Bhavnagar since December, 1937, and continued to hold that office until January, 1948, when responsible Government was introduced by the Maharaja. On January 22, 1948, the Maharaja passed an order granting the assessee a monthly pension of Rs. 2,000, which was the same as the monthly salary he was drawing at that time. On March 1, 1948, the Bhavnagar State merged in the United State of Saurashtra and the Maharaja ceased to be the ruler of that State. On May 31, 1950, the Maharaja directed Premchand Roychand & Sons, with whom he had an account, to pay by cheque to the assessee Rs. 5 lakhs out of, the amount lying to the credit of his account. The amount was paid to the assessee on June 12. Six months later when the accountant asked for instructions as to how that amount should be adjusted the Maharaja made the following order on December 27, 1950 : In consideration of the assessee, the ex-Dewan of our Bhavnagar State having rendered loyal and meritorious services, Rs. 5 lakhs are given to him as gift. Therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal gift or is it remuneration?' If the latter, it is subject to the tax ; if the former, it is not." The Calcutta High Court in David Mitchell v. Commissioner of Income-tax, lays down the test as under: " The test for determining whether casual and non-recurring receipts of this kind are mere gifts or windfalls which are not income or income from the profession or vocation of the assessee, is first, whether the payment is connected with the exercise of the assessee's profession or vocation and, secondly, whether, if it is so connected, it is made merely in appreciation of the personal qualities of the assessee displayed in the course of his engagement or is intended to confer a special benefit on him with respect to the services rendered so as to increase his earnings in the exercise of his profession." The High Court relied upon the following observations of Lord Loreburn L.C. in the well-known case of Cooper v. Blakiston : "Where a sum of money is given to an incumbent substantially in respect of his services as incumbent, it accrues to him by reason of his office...Had it been a gift of an exceptional kind, such as a testimonial, or a contribution for a specific purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue to challenge the correctness of the cash book entries or the statements made in the affidavits. It is further held in this case that the facts proved or admitted may provide evidence to support further conclusions to be deduced from them which conclusion may themselves be conclusions of fact and such inference from facts proved or admitted could be matters of law. The court would be entitled to intervene if it appears that the fact-finding authority has acted without any evidence or upon a view of the facts, which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question. As the Judicial Member of the Tribunal has discarded the facts stated in the affidavits notwithstanding the fact that the veracity of those facts was challenged neither before the Income-tax Officer nor before the Appellate Assistant Commissioner and as the Accountant Member has based his finding without referring to this evidence, it will be useful to refer to the evidence that was produced before the taxing authorities. It is not disputed that the major gifts flowed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om out of his weekly earnings to Indira Devi, Poona. The veracity of these statements in these affidavits was not even questioned by the Income-tax Officer at any time. While the matter was in appeal before the Appellate Assistant Commissioner a letter dated September 28, 1962, written by Don Taxsy was filed. In this letter he has also stated that he was charmed by the voice and books of the assessee. At no time he had received any instructions from the assessee as he did not even meet him prior to July 26, 1959. The affidavits disclose facts of which veracity cannot be challenged if regard be had to a letter dated January 1, 1956, written by Richard Miller which is made a part of the statement of case as annexure "H". In this letter, at a time before major contributions were made by these persons, Richard Miller has stated that the assessee agreed to his suggestion that a temple must be built and he was overjoyed to learn that some other devotees were also contributing to the fund. Richard Miller and Don Taxsy amongst them contributed a sum of Rs. 96,642.70. As neither of these persons had received any instructions from the assessee or ever heard him or even seen him, prior to Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to. That decision, in our opinion, has no application to the facts of the present case, because the Supreme Court in that case took the view that in taking up teaching Vedanta philosophy the assessee was carrying on a vocation and that the payments made by the disciples were received by the recipient from his vocation. In that case the Supreme Court has also taken the view that if the voluntary payments had been made for reasons purely personal to the donee and unconnected with his office or vocation they would not be taxable, but if they had been made because of the office they would be taxable. Having regard to the facts of the present case, we have taken the view that the amounts were contributed by Richard Miller and Don Taxsy and others as personal gifts to the assessee out of considerations of esteem and veneration. We also have further pointed out that none of these persons had at any time obtained the benefit of the teachings by the assessee. In view of this finding the ratio of Krishna Menon's case cannot be attracted. In the view that we have taken on the second contention of Mr. Palkhivala it is unnecessary to, consider his further contention that in any event ..... X X X X Extracts X X X X X X X X Extracts X X X X
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