TMI Blog1931 (12) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... He was thus compulsorily retired from service four years before he should have been. He and the others similarly compulsorily retired presented memorials to the Government of India and the Secretary of State for India setting forth their grievances and this resulted in the issue of the following order by the latter which was published by the Government of Madras on 8th March 1930, viz., that the assessee should receive as compensation; (1) a lump sum equivalent to two-thirds of the difference between the amount received by him in pension from the date on which he was discharged to the date of attaining 55 years of age and the amount he would have received in pay had he been retained in service up to that age and (2) with effect from his 55t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluded. On an examination of two sections of the Indian Income-tax Act., this is made clear. Section 4(1) says: Save as hereinafter provided, this Act shall apply to all income, profits or gains, as described or comprised in Section 6, from whatever source derived, accruing or arising or received in British India, or deemed under the provisions of this Act to accrue, or arise, or to be received in British India. 4. Section 6 deals with the heads of income chargeable to income-tax and reads: Save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income-tax in the manner hereinafter appearing, namely: (1) Salaries, (2) Interest on securities, (3) Property, (4) Business, (5) P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in point is In re Turner Morrison Co. Ltd. A.I.R. 1929 Cal. 212. There a large sum of money had been paid to Messrs. Turner Morrison Co., as compensation for their sudden dismissal because without notice to them in the middle of the year one of their managing agencies was brought to a close. Rankin, C.J., in his judgment points out the distinction between the English cases and the Indian Act dealing with the taxability of lump sum payments made to persons and says: They (the English cases) go upon the question whether a certain, receipt is a perquisite of an office. If it is not a perquisite of an office or a profit of business or trade, then it is not taxable; Consequently, the class of cases known as the Easter Offering cases, e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the assessee would not fall to be taxed as a profit or gain derived from a business since the assessee was not carrying on a business but had been in receipt of a salary in respect of his Government service; and if it is not taxable Under Section 6, then it may be taxable Under Section 10. In my view, it is taxable under the former. 11. Another contention put forward here was that different considerations should apply when payment is made before the termination of a person's service to those which would apply when payment is made after the service has been determined. I cannot agree with that distinction particularly when it is sought to be applied to the facts of this case. I cannot myself see that there is any distinction b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Government service and was being remunerated for his service. If this is so, it is perfectly obvious that the amount paid was taxable, as salary Under Section 6. This case cannot be brought within the provisions of Section 4(3)(v) as capital received in commutation of the whole or a portion of the pension or as being in the nature of consolidated compensation for death or injuries, It is argued that this was compensation for injuries and that that clause refers not only to personal injuries but to injuries a person suffers through his premature dismissal. With that contention I cannot agree. It seems to me to be perfectly clear that that clause applies to personal injuries and none other land that the word injuries is used in that sens ..... X X X X Extracts X X X X X X X X Extracts X X X X
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