TMI Blog1961 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... n, vocation or occupation, which are of a casual and non-recurring nature, or are not by way of addition to the remuneration of an employee. The petitioner was a distinguished and successful lawyer and is an active politician. He held high offices in the Government of this country as Governor-General of India, Governor of a State, Minister in the Union Government and Chief Minister of Madras State. He has all along been an author of books and a writer of great repute. His books and writings are widely read not merely in this country but throughout the globe. In his return of income under the Indian Income-tax Act for the assessment year 1956-57, he showed the following receipts : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public of his contributions they acquired a commercial value. The Tribunal reached the conclusion that this amount was taxable in the hands of the assessee on the following basis : We may at once state that we reject the contention of the department that Kalki and others paid the assessee for services rendered to them. Service , by its very concept, implies that there was an offer and an acceptance and a contract and none of these elements is present in this case. That it has not been a gift has been admitted by the assessee and it is also stated that the payment is for three years, at least in the case of Kalki. It is this 'time' element which, to our minds, has made this receipt a taxable income. It was also conceded that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her it arose out of a vocation or occupation, and whether it was of a casual and non-recurring nature. There are no materials to show that the receipts by the assessee arose out of any contract of employment between him and the Kalki or the Hindustan Times or the All India Radio. But, in our view, that by itself cannot enable the assessee to get out of the clutches of taxation invoking the aid of this special exemption provision. It seems to us to be clear that writing of books and contribution of articles to periodicals and magazines really constitute the vocation of the assessee. A vocation is only a way of living or a sphere of activity for which one has special fitness. It is not necessary that such activity should be one indulged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wyer may spend his leisure hours lucratively in writing books on any subject, Philosophy, Economics, Astronomy or Physical Chemistry. Such earnings by him are certainly taxable as income under the Income-tax Act. A judicial officer with musical attainments may delight the public by giving performances in the All India Radio and obtain payment. It can be said with the utmost propriety that music is a vocation of the officer and he obtained the payment in the exercise of such vocation. The essential test to be applied to determine the true nature of the receipt in cases of this description is, is it in the nature of a personal gift or is it remuneration ? An apparent gift, if it possesses an element of reward for service or work done, migh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee did not expect any payment at the time when he actually contributed the articles to the magazine, and assuming further that a lump sum payment of ₹ 5,000 was voluntarily made by the proprietor of the magazine in the year of account, so long as the payment was received by the assessee as remuneration for the articles subscribed by him, it cannot be deprived of its character as income by merely calling it a gift. The following observation of Sir Richard Collins M.R. in Herbert v. McQuade [1902] 2 KB 631, 649; 4 Tax Cas. 489 can be quoted : Now that judgment, whether or not the particular facts justified it, is certainly an affirmation of a principle of law that a payment may be liable to income tax although it is voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ips or Christmas presents, but it was well known to be a widespread custom in those hunts to give such presents, usually at the Boxing Day meet. When there was no meet on Boxing Day the huntsman did not receive many presents. The Court of Appeal held that the receipts of the huntsman by way of presents accrued to him by virtue of his employment and that they were assessable to income tax. At page 172, Jenkins L. J. observed thus : As to the contention that the motives of the contributors of the voluntary payments should be looked at (or the objects, perhaps one should say, that they had in view), I agree that, generally speaking, where there is no definitely determining factor, like a reference in the contract of employment of the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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