Norman Macleod, Kt., C.J.
1. This is reference under Section 66 (2) of the Indian Income Tax, Act, XI of 1922 by the Commissioner of Income-Tax, Bombay Presidency, in the matter of the assessment of the income of Sir Purshottamdas Thakordaa, hereafter called the assessee In his return of income for the purposes of assessment for the year 1923-24, the assessee, while declaring his income from all sources, had made a note as under :-
Besides this, I received during samvat Year 1978 Rs. 1,88,750 as remuneration for winding up the estate of Omar Sobhani which being an extraordinary source of income is not liable to taxation.
2. The Income-Tax Officer, however, did not exempt this item from assessment. Thereupon an appeal was lodged before the Assistant Commissioner of Income-Tax who held that this item was rightly taxed. Thereupon the assessee applied for a reference, and the Commissioner of Income-Tax has made this reference on the question raised with his opinion thereon.
3. It seems strange that in a reference of this kind, the Commissioner has not stated what was the profession, vocation or occupation of the assessee. But it has been admitted during the course of the argument that the assessee is a cotton merchant.
4. In 1922 there was a crisis in the cotton market owing to endeavours made by the firm of Umar Sobani to corner the market. He had been compelled to keep on making very extensive purchases of cotton In order to maintain prices, but his resources failing it became known to the creditors of the firm, and the market in general, that the firm was not in a position to finance further the huge purchases which had been made so that its failure had become imminent. As a crisis would necessarily result if all its purchases were thrown upon the market, the firm and its creditors looked out for some one who would command the confidence of themselves and of all concerned to hold the cotton already purchased and sell it to the best advantage. The assessee consented to be appointed under a power of attorney to dispose of all the cotton bales for and on behalf of the firm, to pay what was due to the several Muccadams and Banks, and after deducting out of the nett sale proceeds of the cotton bales all his costs, charges and expenses in respect thereof and his remuneration, to distribute the balance amongst the several persons and firms whose names had already been submitted by the firm of Umar Sobani to the assessee. Under that power of attorney the assessee sold over 1,00,000 bales which realized about Rs. 1,63.00,000, and received as his remuneration Rs. 1,88, 750, It will be noted that in his return of income when claiming exemption for this sum, the assessee refers to it as an extraordinary source of income. He does not refer to it as being income not arising from business or the exercise of his profession, vocation or occupation, which was of a casual and non-recurring nature However we may take it that the question now before us is whether the receipts in question cm be exempted under Section 4 (3) (vii) of the Act, which says : 'Any receipts not being receipts arising from business or the exercise of profession, vocation or occupation, which are of a casual and non-recurring nature, or are not by way of addition to the remuneration of an employee.'
5. It has been argued for the assessee that these receipts did not arise from business; that 'business' connotes continuity; and that only the receipts arising from a business which is carried on continuously can be assessed. But the section refers to receipts arising from 'business' and not to receipts arising from 'a business.' The definition of 'business' in Section 2 (4) is as follows:-''Business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture', and consequently it is not necessary that the receipts should arise from a business continuously carried on during the year to make them liable to assessment. Even if they arose from a single adventure in business they would be liable to be taxed.
6. Now it seems clear that the profession or occupation of the assessee being that of a cotton merchant, any receipts arising from the buying and selling of cotton would be considered as arising from trade or commerce, and the argument that receipts from an extraordinary transaction connected with business, such as the one in this case, which has only occurred owing to exceptional circumstances, and which would not be likely to occur again for many years, can be placed in the same category as receipts entirely disconnected with business or the profession or vocation or occupation of the assesses which might be considered of a casual and non-recurring nature, cannot be accepted.
7. We are clearly of opinion, therefore, that the remuneration earned by the assessee owing to his having been appointed under a power of attorney by Umar Sobani to realise the cotton which he had purchased, must be considered as receipts arising from business, and, therefore, liable to taxation.
8. There is no need consequently to consider the argument of the Commissioner with regard to the meaning of the word 'business' or the word 'casual,' or the English authorities which have been cited before us.
9. The answer to the reference will be that in our opinion the receipts in question are not entitled to be exempted from taxation.
10. The assessee to pay the costs on the Original Side scale.