1984 PLP 131 (PTD)

SALEEM AKHTAR, J.‑The Department bas filed application under section 66(1) of the Income‑tax Act raising the following question :‑ (a) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal ‑ had any material to hold that the assessee was not singer? (b) Whether on the facts and in the circumstances of the case the Income tax Appellate Tribunal was justified that the Royalty received by the assessee from Messrs Gramophone Company, was also exempt from taxation under section 4(3) (xii‑b) of the Income‑ax Act? The appellant filed his return of income for the assessment year 1969‑70 showing an income of Rs. 70,

265. The respondent claimed exemption in respect of Rs. 4,830 being an amount received for artistic work performed by him as a non‑professional artist. The respondent is a director of Messrs Vali and Sons Limited. Besides this he has also received income from dividend and capital gain etc. The Income‑tax Officer refused to grant exemption under section 4(3) (xii‑b) and treated Rs. 4,850 as professional income of the assessee. The respondent filed an appeal before the Assistant Appellate Income‑tax Commissioner which was allowed. The exemption was allowed taking into consideration the fact that the income from singing is very small as compared to other income, therefore, singing cannot be taken as respondent's profession. The Department went in appeal before the learned Tribunal which dismissed it with the following observation :‑ "In the circumstances we have come to the conclusion that the respondent‑assessee was not a professional Artist who earned his livelihood by singing. Singing was his pastime or hobby and he sang only on some special occasions and that also not‑ for the sake of earning money. The amounts received by him in this assessment year were paid to him by Radio Pakistan, Television Corporation and Gramophone Company according to their own practice." Section 4(3) (xii-b) of Income‑tax Act under which exemption has been claimed reads as follows :‑ (3) Subject to the provisions of this Act any income, profits or gains falling within the following classes shall not (to such extent as may be specified in this subsection or prescribed in this behalf), be included in the total income of the person receiving them. (xii‑b) Any payment not being payment to which clause (xii‑c) applies received by an assessee not being a professional writer, journalist or artist as remuneration or compensation for literary or artistic work: Provided that where such payment or payments received by the assessee in any one previous year exceeds or exceed (five thousand) rupees, nothing in this clause shall apply to so much of the said payment or payments taken together as exceeds the aforesaid amount. Explanation:‑‑In this clause, 'writer' and 'artist' include a poet, painter or sculptor. (xii‑c) Any income derived by an assessee, being the author or co‑author of such literary work of a creative nature as may be approved by the Central Hoard of Revenue for the purposes of this clause from such work.'. Under this provision exemption can be claimed by an assessee in respect of remuneration or compensation received for literary or artistic work provided he is not a professional writer, journalist or artist. The extent to which he is entitled to claim exemption is either specified in the Act or the Rules. A professional artist, journalist or writer cannot claim exemption. No doubt the respondent is a well‑known singer, but the question is, whether he is a professional singer and earns his livelihood from this profes sional. It is an admitted position that be has shown his income of Rs. 70,26 which is certainly not drawn entirely from singing. . He is a director of a Company and has also earned income from dividend and capital gains. His source of living is not signing. In Ballentine's Law Dictionary, the meaning of the word "professional" is as follows :‑ "one who has made a career, engaging for pay or prize money out an activity others follow for diversion or pleasure. One who has concentrated his efforts upon performing an art for pay as a means of subsistence as distinguished from the amature who engages for the sake of art or his own pleasure." To ascertain whether an artist is a professional, one has first to inquires whether the Artist is engaged in performing work of art for earning his living and substantial portion of his income is drawn by persuing such performances. If the substantial portion of earning is from such performance and it is the main source of living then such artist will be called professional. Where not only substantial, but major part of earning of an assessee is from business vocation and small portion is only from singing he cannot be termed as a professional artist. In these circumstances in the present case, the learned Tribunal after considering the facts on record has drawn correct conclusion that the respondent assessee was not a professional artist. We, therefore; answer questions Nos. I and 2 in the affirmative. M. B. A. Reference answered in affirmative.