Law:

Section:

Section 10(3) of the Income-tax Act, 1961 - Exemptions - Casual and non-recurring receipts - Assessee, an individual, was receiving income from commission on sale of products 'B' group concerns - In relevant previous year he received certain sum from 'C', another concern of B group, for helping it in sale of its shares and for setting up of a factory - Tribunal found that assessee's principal source of income was commission received from various 'B' group concerns and that assessee was not a share broker, nor in business of helping industries in setting up of their factories - Whether impugned amount received by assessee from 'C' was casual and non-recurring in nature and thus exempt under section 10(3) - Held, on facts, yes Facts The assessee, an individual, enjoyed income from commission on the sale of products like cycle, linoleum, jute-matting, etc., manufactured by various 'B' group concerns. During the relevant previous year, he was paid a sum of Rs. 25,000 by 'C', another B group concern, for helping it for the sale of its share and for setting up of a factory. The assessee claimed that the said amount was exempt from tax under section 10(3). The ITO rejected the assessee's claim on the ground that the impugned amount formed part and parcel of the assessee's normal and regular business and held it liable to be taxed. On appeal, the Tribunal found (i) that the assessee's principal source of income was commission received from various B group concerns for the sale of the products mentioned above, (ii) that he was not a share broker, nor in the business of helping industries in setting up of their factories, and (iii) that the impugned amount was paid to him by 'C' ex gratiain recognition of his services rendered by assisting the former in the disposal of their shares as well as setting up their factory. Accordingly, the claim of the assessee was allowed. On reference: Held The words 'casual and non-recurring' have not been defined in the Act and they must, therefore, receive their plain and ordinary meaning. In the Oxford Universal Dictionary the word 'casual' has been defined as meaning, inter alia, unsettled. In the context of the statute, 'unsettled'…

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