1996 PLP 591 (PTD)

An agent employed to make bargains and contracts for a compensation. A dealer in securities issued by others. A middleman or negotiator between parties. A person dealing with another for sale of property. A person whose business it is to bring buyer and seller together. The term extends to almost every branch of business, to realty as well as personality. One who is engaged for others, on a commission, to negotiate contracts related to property. An agent of a buyer or a seller who buys or sells stocks, bonds, commodities or services, usually on a commission basis. Ordinarily, the term is applied to one acting for others, but is also applicable to one in business of negotiating purchases or sales for himself. Vocation: The word 'Vocation' has been defined as: One's regular calling or business. One's occupation or profession. The activity on which one spends the major portion of one's time and out of which one makes one's living

(Employers' Liability Assur. Corporation v. Accident and Casualty Ins. Co. of Winterthur, Switzerland, C.C.A. Ohio 134 F. 2d., 566, 568). Profession: The term 'profession' involves the idea of an occupation requiring either purely intellectual skill, or of manual skill controlled as in painting and sculpture, or surgery, by the intellectual skill of the operator, as distinguished from an operation which is substantially the production or sale or arrangements for the production or sale of commodities: ' In my view, it is impossible to lay down any strict legal definition of what is a profession, because persons carry on such infinite varieties of trades and businesses that it is a question of degree in nearly every case whether the form of business that a particular person carries on is, or is not, a profession. Accountancy is of every degree of skill or simplicity. I should certainly not assent to the proposition that as a matter of law every accountant carries on a profession or that every accountant does not. The fact that a person may have some knowledge of law does not, in my view, determine whether or not the particular business carried on by him is a profession. Take the case that I put during the argument of a forwarding agent. From the nature of his business, he has to know something about Railway Acts, about the classes of risk that are run in sending goods in a particular way, and under particular forms of contract. That may or may not be sufficient to make his business a profession. Other persons may require rather more knowledge of law, and it must be a question of degree in each case. Take the case before Rowlatt J. of a photographer: Cecil v. IRC (1919) 36 TLR

164. Art is a matter of degree, and to determine whether an artist is a professional man again depends, in my view, on the degree of artistic work that he is doing. All these cases which involve questions of degree seem to me to be eminently questions of fact, which the Legislature has thought fit to entrust to the Commissioners, who have, at any rate, from their very varied experience, at least as much knowledge, if not considerably more of the various modes of carrying on trade than any judge on the Bench. (Currie v. IRC, Durant v. IRC: (1921) 2 KB 332 at 340 (CA) per Scrutton L.J. It seems to me to be dangerous to try to define the word profession'... There are a good many cases about which almost everybody would agree. Everybody would agree, F should think, that when you find a business, however extensive and, however distinguished in some ways it may be, which consists merely of selling property, whether real or personal, that is not a profession. It is necessary to add the word 'merely', since a sculptor, for instance, may be said to be selling goods. I know there may be a question whether one can regard the contract in that case as a contract for sale, but, if it is not a contract for sale, it may be described as a contract to do work and labour, and there, again, everybody would agree as a general rule that a man who earns his money merely by doing work and labour, without more, is carrying on a trade and not a profession. Again, the word 'merely' has to be inserted to guard against it being thought that many people are not carrying on a profession who at the same time may be said to be doing work or labour. I think that everybody would agree that, before one can say that a man is carrying on a profession, one must see that he has some special skill or ability, or some special qualifications derived from training or experience. Even there one has to be very careful, because there are many people whose work demands great skill and ability and long experience and many qualifications who would not be said by anybody to` be carrying on a profession. Ultimately, one has to answer this question: Would the ordinary man, the ordinary reasonable man

the man, if you like to refer to an old friend, on the Clapham omnibus

say now, in the time in which we live, of any particular occupation? I do not believe one can escape from that very practical way of putting the question; in other words, I think it would be in a proper case a question for a jury, and I think in a case like this it is eminently one for the Commissioners. Times have changed. There are professions today which nobody would have considered to be professions in times past, Our forefathers restricted the professions to a very small number, the work of the surgeon used to be carried on by the barber, whom nobody would have considered a professional man. The profession of the chartered accountant has grown up in comparatively recent times, and other trades, or vocations. I care not what word you use in relation to them, may in future years acquire the status of professions. It must be the intention of the Legislature, when it refers to a profession, to indicate what the ordinary intelligent subject, taking down the volume of statutes and reading the section, will think that "profession" means. I do not think that the lawyer as such can help him very much." (Carr v. IRC (1944) 2 All ER 163 at pages 166, 167, (CA), per Du Pareq L. J.). "Profession" as defined in Concise Oxford Dictionary means, among other things, vocation, calling, specially one that involves some branch of learning or science, as the learned profession (divinity, law, medicine). A profession is normally associated with the exercise of intellectual or technical equipment resulting from learning or science. In Words and Phrases, Permanent Edition 34, the word "profession has been described as under: "Profession" implies professed attainments in special knowledge, as distinguished from mere skill: Teague v. Graves, 27 N.Y.S. 2d., 762, 765, 261 App. Div.

652. The word "profession" is defined as the method or means pursued by persons of technical or scientific training. Board of Superiors of Amherst County v. Boaz (10 SE 2d., 498, 499, 176 Va. 126). "Profession" within statute exempting practitioners of a profession from unincorporated business tax refers to a status which requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialised instruction and study: Traub v. Goodrich,- (143 N.Y. S.2d., 334, 335, 286 App. Div. 927). A "profession" is a vocation in which a professed knowledge of some department of learning or science is used in its application to the affairs of others or in the practice of an act founded on it; a vocation founded upon prolonged and specialised intellectual training which enables a particular service to be rendered. State ex rel. Sisemore v. Standard Optical Co. of Or., (188 P. 2d., 309, 311, 182 Or. 452). Real estate brokerage was not a "profession" within the meaning of zoning ordinance in residential district. Village of Riverside v. Kuhne, (82 N.E. 2d., 500, 506, 325

111. App. 547). While literally the word "profession" may be applied to any calling requiring special knowledge of some branch of science or learning, historically and ordinarily it is limited to such avocations as the law,. the ministry, medicine, military science, engineering, and the like. Dvorine v. Castelberg Jewelry Corporation, 185 A. 562, 566, 170 Md.

661. Custom house brokers were not practising a "profession" within the meaning of statute exempting from unincorporated business tax cases where specified amount of income was derived from services rendered "in the practice of any other profession", and, hence such brokers were subject to tax: Tower v. State Tax Commissioner, 26 N.E. 2d., 955, 957, 282 N.Y.

407. Generally, a "profession" may be said to include any occupation or vocation in which a professed knowledge of some department of science or learning is used by its practical application to the affairs of others, either advising, guiding and in serving their interest or welfare in the practice of an a. founded upon it, the word implying attainments in professional knowledge distinguished from mere skill and the application of such knowledge to uses ft others as vocation. City of New Rochelle, on complaint of Dassler v. Friedman: 78 N.Y.S. 2d., 681, 684, 190 Misc.

654. A firm engaged in developing new textile fabrics and working or technical problems in connection with production thereof, and in addition: buying and selling merchandise for its own account and for the account c: others, was not exempt from unincorporated business tax as a firm engaged i the practice of a "profession". Tax Law, 386 et seq. People ex re. Seidman Graves 22, N.Y.S. 2d., 985, 986, 260 App. Div.

898. Under compensation statute excluding from definition of employer person whose employment is not in the usual course of "trade, business, occupation or profession" of the employer, quoted words connote activities of persons or corporations of some continuity of existence and a degree of regularity and permanently which attaches to one's method and means of material being and livelihood and are nearly synonymous and do not bear any relation to the functions, natural or statutory, of political sub-divisions. Code 1936 1887(2)(b). The word "trade" signifies barter and exchange, not restricted to commodities, but including transactions involving the medium of money and "occupation" is that activity in which a person, natural or artificial, is engaged with the element of a degree of permanency attached. The word "profession" is defined as the method or means pursued by persons of technical or scientific training and the word "business" implies some constant and connected employment as distinguished from an isolated act or two. Board of Superiors of Amherst County v. Boaz (10 S.E. 2d., 498, 499, 176 Va. 126). A consultant in matters of corporate finance, and reorganization whose knowledge and skill resulted from business experience and not from any formal education or special instruction, conducted a "business" subject to unincorporated business tax and did not practise a "profession" exempt from tax. Tax Law, 386 et seq., 386-a. People ex rel. Moffett v. Bates, 93 N.Y.S: 2d., 313, 316, 276 App. Div.

38. Very generally the term "profession" is employed as referring to a calling in which one professes to have acquired some special knowledge, used by way of instructing, guiding, or advising others or of serving them in some art; and employment, especially an employment requiring a learned education; an occupation that properly involves a liberal education or its equivalent and mental, rather than manual labour, specially one of the three learned professions; any calling or occupation involving special mental and other attainments or special discipline, as editing, acting, engineering, authorship. The word implies professed attainments in special knowledge as distinguished from mere skill; intellectual skill as distinguished from that used in an occupation for the production or sale of commodities. "Profession" is the occupation which one professes to be skilled in and to follow; a vocation in which a profess knowledge of some department of learning or science is used in its application the affairs of others, or in the practice of an art grounded upon it, applied specifically to the three learned professions

divinity, law and medicine Formerly, theology, law and medicine were specifically known as "the profession", but, as the applications of science and learning are extended other departments of affairs, other vocations also receive the name. The word "profession" is a practical dealing with affairs as distinguished from mere stun or investigation; and an application of such knowledge for others as a vocation as distinguished from its pursuits for its own purposes. State v. Cohn, 165, S 449, 450, 184 Laq.

53. In Lakshminarayan Ram Gopal and Son Ltd. v. Government Hyderabad (1954) 25 ITR 449 (SC), the appellants were appointed under; agency agreement as agents of the company for a period of 30 years. Under the agreement, the appellants were to act as such agents till they carried on genet management of the company subject to the control and supervision of the directors. The appellants were entitled to remuneration by way of commission a certain percentage of the sale proceeds of the company. The question w whether the appellants were employees of the company and whether the remuneration was liable to excess profits tax. It was held by the apex Court that the appellants were the agents of the company and not merely the servants of the company remunerated by wages or salary. It was further held that the appellants as agents of the company we carrying on business and the remuneration which the appellants received fro the company in terms of the agency agreement was business profit. From the above judgment of the Supreme Court, the activities carried on under the agency agreement were held to be business. In the case of a broke the activities are carried on either under a written agreement or even a verb agreement in respect of different constituents and the activities, therefore, would amount to business. The Tribunal has proceeded only on the basis that so manual/professional skill is required for earning income from brokerage which could not be the only criteria. There should be some special qualification of person apart from skill and ability, which is required in carrying on any activity which could be considered as profession. This could be by having education it particular system either .in the college or university or it may be even experience. No such finding has been given by the Tribunal with regard personal qualification and, therefore, we are of the view that the Income Tax Appellate Tribunal was not justified in coming to the conclusion that the income from brokerage should be assessed as professional income and not brokers income. The reference is, accordingly, answered in favour of the Department and against the assessee. No order as to costs. M.B.A./1065/Tax Reference answered.