TMI Blog1982 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... otection had created a feeling of gratitude in his mind and to translate it into concrete shape, he was making the gift of the lands to the assessee. The gift deed specifically provided that the assessee should not sell the lands gifted to him without obtaining the permission of the donor. Coming to know of this gift deed, the ITO reopened the assessment of the assessee for the assessment year 1960-61 under s. 147(a) of the I.T. Act, 1961, hereinafter referred to as " the Act ". The assessee objected to the value of the lands gifted being treated as taxable income, his contention being that the gift had been made to him by Kanagasabai Pillai not as remuneration for the professional services rendered by him but only in appreciation of his personal qualities. The ITO did not accept the assessee's contention but proceeded to hold that the gift was made by the donor in consideration of the professional services rendered by the assessee as doctor and, therefore, the receipt was definitely not of a casual and non recurring nature. He determined the value of the lands gifted at Rs. 65,000 which was taken as chargeable to tax. Aggrieved by such assessment, the assessee preferred an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Tribunal, the Revenue has obtained a reference to this court on the following question of law : "Whether, on the facts and in the circumstances of the case, the sum of Rs. 65,000 covered by the settlement is chargeable to tax as professional income in the hands of the assessee as a doctor ? " From the facts referred to above, it could be seen that the assessee treated Kanagasabai Pillai during the period from November, 1957, to December, 1958, in his nursing home at Madras and Kanagasabai Pillai got completely cured of his illness. For the professional services rendered by the assessee, there was admittedly a payment of Rs. 4,082 then and there. It is not the case of the Revenue that after payment of Rs. 4,082 any further amount was outstanding towards the assessee's fees for the professional services rendered by him, and that as the amount remained unpaid till March 9, 1960, the gift deed was executed. When Kanagasabai Pillai had paid admittedly a sum of Rs. 4,082 as and for fees for the professional services rendered by the assessee, the gift in question was made by the donor not in discharge of his liability to pay the fees for the assessee's professional servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, 1922. The Supreme Court considered the said question as comprising two aspects, (1) whether K was carrying on an avocation, and (2) whether the amounts in question can be treated as profits and gains of the said avocation. On the first aspect, the Supreme Court held that the word " avocation " would take in the activity of K in teaching Vedanta in a regular and organised manner. On the second aspect, it took the view, after considering a large number of authorities, both Indian and English, that the payments made by L were income arising from an avocation and they were not casual or non-recurring receipts and therefore, the payments are taxable. In that case the Supreme Court observed (p. 54) : " It is well established that in cases of this kind the real question is, as Rowlatt J., put it in Reed v. Seymour [1926] 1 KB 588 (KB): 'but is it in the nature of a personal gift or is it a remuneration ? ', an observation which was quoted with approval by Viscount Cave L.C., when the case went up to the House of Lords with the addition, 'If the latter, it is subject to tax; if the former it is not' : see Seymour v. Reed [1927] AC 554. We find it impossible to hold in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that the professional services rendered by the assessee cannot be the consideration for the execution of the gift deed. Similarly, the decision in P. Krishna Menon v. CIT [1959] 35 ITR 48 (SC), will not apply to the facts of this case as it was specifically found in that case that the consideration for the gift was only for the benefit of the assessee's teachings in Vedanta and, as already said, in this case, the gift is not a consideration for the professional services rendered, for it has already been duly compensated. We are of the view that the facts of this case will clearly fall within the principle laid down by the Supreme Court in Mahesh Anantrai Pattani v. CIT [1961] 41 ITR 481, the facts of which are somewhat similar to the case on hand. In that case the assessee was the Chief Dewan of the Bhavnagar State from December, 1937, to January, 1948, when responsible government was introduced by the Maharaja and the assessee was given pension. 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 June 12, 1950, the Maharaja gave a sum of Rs. 5 lakhs from his personal account to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not taxable lies on the assessee. In that case the assessee who was an exponent of the epics like Ramayana and Mahabharata was assessed to income-tax on cash presents received by him on the occasion of his Shastiabdapoorthi from the public. The AAC and the Tribunal confirmed the assessment. When the matter came before this court, this court held that as the assessee was being remunerated separately for his discourses as and when such discourses were held, there was no material for saying that the cash receipts received on the occasion of his Shastiabdapoorthi was actually remuneration paid in connection with the past performance though the occasion for making the payment was his Shastiabdapoorthi and that in the absence of any such material, the Tribunal's assumption that the said sum was remuneration has no basis whatsoever and that, therefore, the assessment could not be sustained. This court has followed the decision of the Supreme Court in Parimisetti Seetharamamma v.CIT [1965] 57 ITR 532 , abovereferred to . In Sewal Singh Ajit Singh v. CIT [1980] 126 ITR 732, the Punjab and Haryana High Court held in similar circumstances that the onus is on the Revenue to show that particu ..... 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