Law: Income Tax Act, 1922

Section: 4(3)(vii)

Section 10(3) of the Income-tax Act, 1961 [Corresponding to s ection 4(3)(vii) of the Indian Income-tax Act, 1922] - Casual and non-recurring receipts - Assessment year 1956-57 - Assessee claimed payments received towards contributing articles etc. from certain journals and All India Radio to be casual and non-recurring receipts and, thus, exempt under section 4(3)(vii) - Whether, though receipts did not arise out of any contract of employment between assessee and concerned journals or All India Radio that by itself could not get assessee out of clutches of taxation invoking aid of special exemption provision, since writing of books and contributing articles to periodicals and magazines constituted vocation of assessee - Held, yes - Whether so long as payments were received by assessee as remuneration for articles subscribed by him, it could not be deprived of its character as income, by merely calling it a gift - Held, yes - Whether assessee having no doubt received payment only as reward for work done by him, impugned receipts were not exempt from taxation under section 4(3)(vii) of 1922 Act - Held, yes FACTS The petitioner was a distinguished and successful lawyer and was an active politician. He held high offices in the Government as Governor-General of India, Governor of a State, Minister in the Union Government and Chief Minister of Madras State. He had all along been an author of books and a writer of great repute. His books and writings were widely read not merely in this country but throughout the globe. In his return of income for the assessment year 1956-57, he claimed certain receipts from print and audio medium as casual and therefore, exempt from tax. The ITO however, brought the entire sum to tax on the ground that the petitioner had received it for services rendered in the exercise of his occupation as a writer. On appeal, the AAC was of the opinion, that the petitioner only took to writing as a hobby, that the writing was not a source of his income, that the receipt was of a casual and non-recurring nature, and was therefore exempt under section 4(3)(vii). On appeal by the department, the Tribunal observed that the assessee had been…

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