Law: Income Tax Act, 1961

Section: 10(3)

Law: Income Tax Act, 1922

Section: 4(3)(vii)

Section 10(3) of the Income-tax Act, 1961 [Corresponding to section 4(3) (vii) of the Indian Income tax Act, 1922] - Casual and non-recurring receipts - Assessment year 1951-52 - Assessee, a chief justice of High Court, was requested to act as an umpire in relation to an ongoing arbitration proceedings involving Union of India and a company - Initially, assessee refused to take said assignment on ground of being a Chief Justice but on special request made by a member of Government of India, he agreed to act - Though there was absolute prohibition against judges being paid any fee for taking up any other works, but in case of assessee, Government relaxed said prohibition and he was paid a fee of certain sum for acting as umpire - Assessee in his return claimed said fee as casual and non-recurring receipt under section 4(3)(vii) - Whether receipt of amount in question by assessee for acting as an umpire could not under any circumstances be construed as a receipt from exercise of a profession, vocation or occupation - Held, yes - Whether therefore, impugned receipt was a casual and non-recurring one and consequently, entitled to exemption- Held, yes FACTS The assessee at the relevant time was a puisne Judge of the Allahabad High Court. After taking the permission of the then Chief Justice, he consented to act as an umpire in the ongoing arbitration proceedings in relation to some dispute. Thereafter, the assessee became the Chief Justice in 1947, and considered that it was not proper or permissible for him to act as an umpire. In 1949 he heard that the matter was going to be referred to him for its being decided in accordance with the previous decision taken. The assessee wrote to S that it would not be right for him to act as an umpire, and, therefore, he declined to do so. Thereafter, on or about 20-2-1950, S, suddenly died of heart failure. In this situation, the late SP who was then the Member of the Government of India, Industries Department, made a personal appeal to the assessee, vide letter dated 23-2-1950, to waive his objection to work as an umpire, as otherwise it would involve the Government and the other party to the dispute in unnecessary expense and…

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