TMI Blog1984 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 to tax, as ever since 1964-65, the assessee had been in receipt of such remuneration for arbitration and that had also been assessed to tax, which had been acquiesced in by the assessee. On appeal to the Appellate Assistant Commissioner, he took the view the assessee was not carrying on any business or profession, that agriculture was his vocation or occupation and, therefore, the appointment of the assessee as arbitrator was casual with no expectation of payment of fee or recurrence thereof and would, therefore, be exempt under section 10(3) of the Act. On further appeal to the Tribunal at the instance of the Revenue, the Tribunal found the following facts: (1) The assessee had specialised knowledge of industrial law and persuasive ability of a high order to settle disputes amicably and was, therefore, suitable for and sought after as an arbitrator : (2) The qualifications of the assessee, his skill and experience, his availability as an arbitrator and his remuneration were all well-known ; (3) That ever since the retirement of the assessee from service, he had accepted arbitration work every year from 1962-63 onwards and that the arbitration work was given to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the Revenue, who contended that the Tribunal was therefore justified on the facts in concluding that the assessee was exercising an occupation and, therefore, the exemption under section 10(3) of the Act would not be available to the assessee. The decision in B. Malick v. CIT [1968] 67 ITR 616 (All) relied on by the learned counsel, for the assessee was distinguished on the ground that it was peculiar on its facts and an unusual one relating to the case of a sitting judge of the High Court who was requested to act as an umpire and that such considerations do not apply to the facts found in this case. We may briefly notice the provisions of section 1 of the Act for purposes of this case. That provides that in computing the total income of a previous year, any income falling within any of the clauses set out therein shall not be included. Clause (3) refers to receipts which are of a casual and non-recurring nature as a category of income to be excluded, unless they are (i) capital gains ; (ii) receipts arising from business or the exercise of a profession or occupation ; or (iii) receipts by way of addition to the remuneration of an employee. Under section 2(36) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervations of Braund J. in Lala Indra Sen, In re [1940] 8 ITR 187 (All) at page 218 to the following effect : "I should, for myself, be very unwilling to try to lay down any general definition of what a 'business', 'profession', 'vocation' or 'occupation' is, because it is a matter which, to my mind, must necessarily depend in every case upon the circumstances of the assessee, the particular things he does and the degree to which, and the object with which, he does them ...... The truth I think is in this, as in so many other cases, that no exhaustive test can be applied but that all the surrounding circumstances must be considered and commonsense applied. If there is one test which is, as I think, more valuable than another, it is to try to see what is the man's own dominant object-whether it was to conduct an enterprise of a commercial character or whether it was primarily to entertain himself. If the latter was his real objective, I do not think that the circumstance that his hobby might possibly yield him a reward is conclusive of this question whether what he is doing constitutes a 'business', 'profession', 'vocation', or 'occupation' within the meaning of this Act." We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the assessee has been thought of as a suitable and even a desirable arbitrator, is clearly made out by the number of arbitrations participated in by him since 1963-64 onwards. Indeed, it appears to us that if the need for an arbitrator for settling industrial disputes should arise in the area where the assessee is living, the obvious choice would be the assessee. Industrial adjudication through experienced arbitrators has come to stay and there is nothing casual or non-recurring about either industrial disputes or their adjudication by arbitration. It can even be stated that the possibility of the assessee being appointed as an arbitrator to resolve such industrial disputes could be expected or anticipated. However, the fact remains that in none of the arbitrations, the work was done by the assessee gratis or for pleasure or as a matter of diversion from routine. The amounts received by the assessee retained the attributes of remuneration and totally lacked the features of a personal gift. The arbitration work in respect of which the assessee's services were sought had all been channelised or routed through a firm of solicitors. This could be only on the basis of the suitabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uneration and the receipt of the remuneration ordered by the court was really of a casual and non-recurring nature. It was emphasised that there can be no rule laid down with regard to what was of a casual and non-recurring nature, but that each case must be decided on its particular facts. In the case referred to earlier, the assessee was a merchant and he had a solitary plunge in the arbitration pool without any stipulation for remuneration. Nobody including himself expected a second or further plunge. But, in this case, the assessee knows what he has been doing and has been solely soaked in arbitration so much so that he can be said to be almost dripping wet in the arbitral process. The case of Ahmad Badsha Saheb [1943] 11 ITR 590 (Mad) can thus have no application at all. The next in point is CIT v. V P. Rao [1950] 18 ITR 825 (Mad). That was a case of a retired judge of the Madras High Court, like the assessee, who had accepted to serve as an arbitrator for enquiring and reporting about a dispute which had arisen between two districts, now in Andhra Pradesh. The Government agreed to pay him a lump sum of Rs. 3,000 and travelling allowance as well. The assessee claimed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged the duties of an umpire, was held to be casual or non-recurring and not referable to the exercise of any business, profession or occupation. The appointment of a sitting judge as an arbitrator or umpire was something totally unanticipated or unforeseen particularly in view of the impediment laid on them in the way of accepting and discharging such responsibilities. It was in that view, the court held that the remuneration received by the assessee under such circumstances was of a casual and non-recurring nature and also not arising from the exercise of any profession, vocation or occupation. That decision cannot, therefore, be pressed into service by the assessee to claim that, on the facts of this case also, the receipts would be exempt under section 10(3) of the Act. We are, therefore, of the opinion that the Tribunal was quite correct in its conclusion that arbitration work was the occupation of the assessee and the receipts arose from the exercise of such occupation within the meaning of section 10(3) of the Act and, therefore, such receipts are taxable, as they are excluded from the purview of section 10(3) of the Act. We do not think it necessary to go into the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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