1. This appeal has been filed by the department against the order, dated 22-7-1982, of the AAC relating to the assessment year 1980-81, the previous year of which ended on 31-3-1979.
2 to 7. [These paras are not reproduced here as they involve minor issues.] 8. Coming to the merits of the case, Shri S.K. Lahiri urged that the learned AAC erred in his decision and so his order deserved to be set aside and that of the ITO deserved to be restored. The, assessee. is an individual deriving income from property and share of profit from the business styled Dinbazar Foreign Liquor (off) Shop, at Jalpaiguri, which deals in foreign liquor. It is important to note that the firm was engaged in the purchase and sale of foreign liquor. The wife of the assessee was also a partner in the same firm. The ITO invoked the provisions of Section 64(1)(i)of the Income-tax Act, 1961 ('the Act'), and included the share income of the wife of the assessee from the said firm in the total income of the assessee.
9. The assessee appealed to the AAC and contended that the ITO erred in applying the provisions of Section 64(1)0") to the facts of the assessee's case. A certificate from the Superintendent of Excise, Jalpaiguri, was produced before him, which reads as below : This is to certify that Smt. Sudha Mukherjee, wife of Shri Mritunjay Mukherjee of Dinbazar, Jalpaiguri, was granted excise licence No. 1/1977-78 to deal in foreign liquor along with her husband Shri Mritunjay Mukherjee after satisfying the department as to her professional qualification and fitness. She has also undertaken training as sales woman for last 3 years. The licence was granted from 1-4-1977 on being satisfied that she is fully qualified professionally in this line.
The case of the assessee was that the wife, Smt. Sudha Mukherjee, had professional qualification to carry on the business as a dealer in foreign liquor. Since the firm was engaged in professional activities, and since Section 64(1 )(i) refers only to business, the share income of the wife could not be included in the income of the husband.
Reliance was placed on the decision in the case of CIT v. Dr. KK. Shah  135 ITR 146 (Guj.). This argument appealed to the AAC, who accepted the same. He also observed that the aforesaid certificate was not a new piece of evidence because it was produced before him only to confirm what was already narrated before the assessing officer, viz., that the wife of the assessee had professional qualification to carry on the business as a dealer in foreign liquor and so the excise authorities had granted her a licence to do so.
10. Shri S.K. Lahiri urged before me that the case of Dr. K.K. Shah (supra) did not apply to the facts of this case. He pointed out that the aforesaid case of Dr. K.K. Shah (supra), was concerned with a firm of doctors. A doctor husband and a doctor wife were carrying on the activity of running a nursing home for the purpose of treating their own patients. In that case, business has been distinguished from profession and it was held that the income arising out of professional activities do not come within the purview of Section 64(1)(i), while the income arising out of non-professional business activities do come within the purview of Section 64(1)(i). To be more precise, it was held that the income arising out of the activity of treating the patients was professional income outside the purview of Section 64(1)(i). On the other hand, the income arising out of selling drugs to the patients or charging room rent from the patients are business income which is hit by Section 64(1)(i). Shri S.K. Lahiri contended that the aforesaid case was confined to professionals like doctors, lawyers, architects, etc., and did not extend to persons doing business as dealers, even though doing such business required some licence from some statutory authority or other. He also urged that the AAC erred in admitting new evidence in the form of the certificate from the excise authorities without following the procedure laid down in Rule 46A of the Income-tax Rules, 1962 ('the Rules').
11. Shri Sanjay Bhattacharjee, on the other hand, supported the order of the AAC. He stated that the certificate of the excise authorities was not a new piece of evidence and it was produced only to show that licence to deal in foreign liquor was given only to those persons who were professionally qualified. In any case, he urged, the Income-tax Rules were only directory and not mandatory. Coming to the merits of the case, he took me through the order of the AAC and especially the aforesaid certificate. He explained that the assessee was carrying on the business alone until he became an invalid due to an unfortunate mishap. He stated that the assessee was brutally stabbed by miscreants.
He had to request his wife, who was a school teacher, to resign her job and help him in running the business. It was thus the wife joined the assessee's firm. She was also trained in selling liquor and so a licence was taken from the excise authorities. He emphasised the fact that any layman cannot get a dealer licence in foreign liquor and that the licence to the wife of the assessee was granted only because of her professional qualification, as stated in the aforesaid certificate. He strongly relied on the decision in the case of Dr. K.K. Shah (supra) in support of his case.
12. I have considered the contentions of both the parties as well as the facts on record. I find that the question raised in this appeal is, as to whether the activities carried on by the aforesaid firm can be said to be professional activities. At the outset, I must say that the activities carried on by the assessee-firm were definitely business activities, because there could be no firm without business activities and, however, the assessee agrees that it is a firm, such of the business activities may also be professional activities like activities carried on by doctors in treating their patients or the activities carried on by lawyers for their clients. 'Business' includes 'profession' for the purpose of being taxed under the head 'Profits and gains of business or profession'. But, the word 'business' appearing in Section 64(1)(i) does not include profession, as has been held in the case of Dr. K.K. Shah (supra). In fact, the said case has pointed out a clear distinction between the 'profession' and 'business' on the authority of the Supreme Court in the case of Dr. Devendra M. Surti v.State of Gujarat AIR 'There is a fundamental distinction therefore between a professional activity and an activity of a commercial character' (p. 68) :'..." a '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 occupation which is substantially the production or sale or arrangements for the production or sale of commodities.' (p. 67) ' ... a professional activity must be an activity carried on by an individual by his personal skill and intelligence . . . and unless the profession carried on by (a person) also partakes of the character of a commercial nature' (pp. 67-68) the professional activity cannot be said to be an activity of a commercial character.
The Special Bench of the Tribunal in the case of Dr. J.N. Mokashi v.ITO  1 SOT 367 (Bom.) had also considered the meaning of 'profession'. They have held that professional qualification means fitness to do a job or undertake an occupation requiring the exercise of intellectual skill or of manual skill as controlled by intellectual skill. Applying the test laid down by the aforesaid authorities to the facts of the present case, I find that the activities carried on by the firm in which the assessee and his wife were partners were mere business activities and not professional activities. In my opinion, purchasing and selling of a commodity, even foreign liquor, the dealing in which requires a licence from the appropriate authority, does not amount to professional activities. Normally, every trade and business requires some licence or other to carry on the same. A drug seller has to take a licence under the Drugs Act, 1940. Similarly, a dealer in fire-works has to obtain a licence from the Corporation or police authorities. The mere requirement of a licence to deal in a commodity does not make the activity a professional one. The test is different.
That test has been enumerated by the Supreme Court in the case referred to above, It is evident from the decision in the case of Dr. K.K. Shah (supra) that activities carried on by doctors, lawyers, architects and the like alone can be regarded as professional activities. Further, the activities carried on even by those persons can be called professional activities only insofar as they relate to exercise of their intellectual skill in advising their patients or clients. The activities of even doctors, relating to dealing in medicines, have been held to be non-professional activities in that very case. Respectfully following the aforesaid authority, I come to the conclusion that the activity carried on by the aforesaid firm did not amount to professional activity and so it was business activity and the same is squarely hit by Section 64(1)(i). It is well known that Section 64 was enacted to avoid a mischief, i.e., evasion of tax. Hence, this section has to be interpreted in order to prevent the mischief and advance the remedy--CIT v. Sodra Devi  32 ITR 615 (SC.) If the argument of the learned representative for the assessee is accepted, then the mischief will be perpetuated and the remedy will be nullified because there is no business which does not require the application of some skill or other in which case all business activities will become professional and go outside the purview of Section 64. Evidently, such an interpretation being, in my opinion, contrary to the intention of the Legislature, the accepted canons of construction has to be rejected. Hence, with due respect to the learned Central excise authority, I am unable to decide this appeal in favour of the assessee solely on the basis of his certificate, when the facts relevant to the issue in this appeal point to the contrary.
13. For the above reasons, I reverse the order of the AAC and restore that of the ITO.