TMI Blog1958 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... H. Levy of London, U. K. Levy along with others used to receive instructions in Vedanta from the appellant. He used to come to Travancore from England at regular intervals and stay there for a few months at a time and attend the discourses given by the appellant and so had the benefit of his teachings on Vedanta. Levy had an account in Lloyd's Bank at Bombay. On December 13, 1941, Levy transferred the entire balance standing to his credit in this account amounting to Rs. 2,41,103-11-3, to the credit of an account which he got the appellant to open in his name in the same bank. Thereafter, from time to time Levy put in further sums into the appellant's aforesaid account in Lloyd's Bank, Bombay. It appears that the payments so made up to August 19, 1951, amounted to about Rs. 4,50,000. From time to time the appellant got moneys transferred from his account at the Lloyd's Bank, Bombay, to his account in a bank at Trivandrum in Travancore. This appeal arises out of orders for assessment to income-tax passed against the appellant for the assessment years 1122, 1123 and 1124, all according to the Malayalam era. The respective accounting periods according to the Gregorian calendar w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant and there has been no appeal against it by the revenue authorities. We do not think that the case presents any difficulty. It has to be decided on the terms of the Travancore Income-tax Act, 1121 (Malayalam Era), but as the provisions of that Act are, for the present purpose, identical with those of the Indian Income-tax Act, 1922, it would be more convenient to refer to the provisions of the latter. Mr. Sastri, appearing for the appellant, has stated that the case involves really two points. First, was the appellant carrying on a vocation ? And secondly, if he was, can the amounts with which we are concerned, be said to be profits or gains of the vocation ? We agree with his view of the case and proceed to discuss these points. The first question is, whether the appellant was carrying on a vocation. Under section 10 of the Income-tax Act, 1922, tax is payable by an assessee in respect of the profit or gains of any profession or vocation carried on by him. The facts found are that the appellant was studying Vedanta philosophy himself and imparting the knowledge acquired by him as a result of his studies to such as cared to come and imbibe it. There is no evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as we find no want of system or continuity in the activity of the appellant. He had gathered a large number of disciples around him and was instructing them in Vedanta regularly. Levy came all the way from England at regular intervals to obtain such instructions. All this clearly indicates organisation and system. Again, it is well established that it is not the motive of the person doing an act which decides whether the act done by him is the carrying on of a business, profession or vocation. If any business, profession or vocation in fact produces an income, that is taxable income and none the less because it was carried on without the motive of producing any income. This, we believe, is too well established on the authorities now to be questioned. It was decided as early as 1888 in the case of Commissioners of Inland Revenue v. Incorporated Council of Law Reporting and followed ever since, that "it is not essential to the carrying on of trade that the people carrying it on should make a profit, nor is it even necessary to the carrying on of trade that the people carrying it on should desire or wish to make a profit". If that were not so, a person carrying on what otherwise w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor thought he was doing but why the donee received it. So Collins, M. R., in Herbert v. McQuade referring to In re Strong, said at page 649 : " 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 on the part of the persons who made it, and that the test is whether, from the standpoint of the person who receives it, it accrues to him in virtue of his office ; if it does it does not matter whether it was voluntary or whether it was compulsory on the part of the persons who paid it. That seems to me to be the test ; and if we once get to this--that the money has come to, or accrued to, a person by virtue of his office--it seems to me that the liability to income-tax is not negatived merely by reason of the fact that there was no legal obligation on the part of the persons who contributed the money to pay it. " It is well established that in cases of this kind the real question is, as Rowlatt, J., put it in Reed v. Seymour : " But is it in the nature of a personal gift or is it a remuneration ? ", an observation which was quoted with approval by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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