1997 PLP 1354 (PTD)
COMMISSIONER OF INCOME-TAX Versus PRAKASH NARAIN
| Citation | 1997 PLP 1354 (PTD) |
| Forum / Court | 213 ITR 182 |
| Bench Members | V. K. Singhal and Arun Madan, JJ |
| Parties | COMMISSIONER OF INCOME-TAX Versus PRAKASH NARAIN |
| Primary Law | Income-tax |
Q1: What are the key laws and sections cited in 1997 PLP 1354 (PTD)?
This judgment primarily cites: Income-tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1997 PLP 1354 (PTD)?
The case was heard and decided by the 213 ITR 182 bench comprising: V. K. Singhal and Arun Madan, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1997 PLP 1354 (PTD) (COMMISSIONER OF INCOME-TAX Versus PRAKASH NARAIN). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Income from business or income from profession
Profession involves occupation requiring intellectual or manual skill on the basis of some special learning
Brokerage
Is income derived from business and not from profession. Profession involves the idea of an occupation requiring purely intellectual skill or manual skill on the basis of some special learning. There should be some special qualification of a 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 in a particular system either in a college or university or it may be even by experience. Therefore, the income derived by an assessee from brokerage is income derived from business and not income derived from profession as no special skill is acquired. CIT v. Bhagwan Broker Agency (1995) 212 ITR 133 (Raj.) fol. G.S. Bupna for the Commissioner.
Judgment & Decree
The Income-tax Appellate Tribunal Jaipur Bench, Jaipur, has referred the following question of law arising out of its order, dated June 27, 1980, in respect of the assessment year 1977-78 under section 256(1) of the Income Tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that brokerage amounts to profession and not business?" . The brief facts of the case are that the assessee derived income from brokerage and claimed it to be professional income in accordance with Sub Paragraph II of Paragraph C of the Finance Act, 1977. The Income-tax Officer found that income derived is from business and not from profession as no special skill was acquired and, therefore, it cannot be considered to be income from profession. In appeal before the Commissioner of Income-tax (Appeals) also it was considered that profession involves the idea of an occupation requiring purely intellectual skill or manual skill on the basis of some special learning and according, the appeal of the assessee was dismissed. The Income-tax Appellate Tribunal in the second appeal found that profession involves the idea of an occupation requiring either purely intellectual skill or any manual skill and, therefore, brokerage was considered to be a "profession" and not a "business". The Tribunal took into consideration the fact that brokerage was derived by personal exertion without any monetary investment and on that basis the income was considered to be as that from profession. This Court in CIT v. Bhagwan Broker Agency (1995) 212 ITR 133
D.B. Income-tax Reference No.125 of 1981, decided on May 11, 1993
has held as under at page 142: "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 broker, the activities are carried on either under a written agreement or even a verbal agreement in respect of different constituents and the activities, therefore, would amount to business. The Tribunal has proceeded only on the basis that some manual/professional skill is required or earning 'income from brokerage which could not be the only criteria. There should be some special qualification of a 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 in a particular system either in a college or university or it may be even by experience. No such finding has been given by the Tribunal with regard to 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 brokerage; income. " ' In view of the decision of this Court referred to above, the present reference is also answered in favour of the Department and against the assessee. There is no order as to costs. M.B.A./1153/FC???????????????????????????????????????????????????????????????????????????????? Order accordingly.