JUDGMENT
Prakash Narain, J.
(1) The Respondent 1n this case was a Director of M/s. Hari Brothers (P) Ltd., a private limited company. He undertook a foreign tour accompanied by his wife, the cost of which amounting to Rs. 29,793.00 was borne by the Company. This amount was claimed by the company as an expenditure incurred by it for and in the course of its business in the return filed by it for the Assessment Year 1957-58, the relevant accounting year being 1-4-1956 to 31-3-1957. The amount was not allowed as an expenditure incurred by the company and that order became final. The information about this amount not being allowed as an expenditure of the company and as having been held to be an amount paid to the respondent was sent to the Income-tax Officer who assessed the respondent as an individual. As a consequence of this information received by the Income-tax Officer in regard to the respondent, action under section 34(1) of the Income-tax Act, 1922 was initiated against the respondent wherein it was alleged that this amount of Rs. 29,793.00 was taxable in the hands of the respondent but had escaped assessment inasmuch as in the return filed by the respondent for the relevant year as an in dividual the receipt of this amount had not been shown. The Income-tax Officer by his order dated 31st January 1962 taxed this amount in the hands of the respondent holding that it was his income within the meaning of Section 2(6C) (iii) of the Income-tax Act, 1922. The Income-tax Officer repelled the cointention of the respondent that the provisions of Section 2(6C)(iii) were not attracted unless the Director concerned holds substantial interest in the company. Aggrieved by this assessment the respondent filed an appeal which was disposed of by order dated 5th October, 1962 passed by the Appellate Assistant Commissioner of Income-tax, D-Range New Delhi. Before the Appellate Assistant Commissioner two contentions were raised on behalf of the respondent, viz. that the Income-tax Officer was wrong in assessing this income in pursuance of notice under section 34 and that without prejudice to the first contention the expenditure relating to the respondent’s wife could not be included in the income of the respondent. Both contentions were repelled and the assessment order was upheld. The respondent then filed an appeal to the Income-tax Appelate Tribunal, Delhi Bench ‘C.’. New Delhi. Before the tribunal the contention raised was that the incomes sought to be taxed did not fall under the provisions of Section 2(6C) (iii) of the Act as it was neither a benefit nor perquisite and that even if it is income it was exempt from taxation under the provisions of Section 4(3) (vii) of the Act. The Tribuna held that the amount in question was income in the hands of the assessed under the provisions of Section 2(6C) (iii) but the assessed could avail of the exemption provided by section 4(3)(vii) of the Income-tax Act, 1922. Accordingly, the appeal was accepted and the assessment was set aside. Thereupon the department claimed a reference and the following question has been referred to the High Court:- “WHETHERon the facts and the circumstances of the case the amount of Rs. 29,793.00 was liable to be taxed in the assessed’s hand ?
(2) The statement of case as sent to this Court is not very clear or precise. All the same certain admitted facts can bs discerned from the record placed before us. These are as follows :-
(I)the respondent accompanied by his wife went abroad in pursuance of a resolution passed by the compamy which is in the following terms:- “RESOLVEDthat Shri Nar Hari Dalmia be and is hereby requested to undertake tour of the European countries on behalf of the company to study establishment of further industries in India by floating new companies under the Managing Agency of this company. Further resolved “that first class air passage expenses and or first class steamer and train journey as necessary for Mr. & Mrs. Nar Hari Dalmia be met out of the funds of the company and Rs. 200.00 per day be and is hereby sanctioned as diem allowance hotel and other out of pocket expanses during the period of his tour abroad from the day he leaves India till the day of his return to India. The said allowance is to cover the expenses of both Mr. & Mrs. Nar Hari Dalmia. Further resolved that Shri J. Dalmia, Managing Director of the company be and is hereby authorised to advance him necessary amount out of the funds of the company as he finds necessary”.
(II)a sum of Rs. 29,793.00 was paid to the respondent by the company. A part of this amount was paid by way of reimbursement but it is not clear whether the balance was paid by way of reimbursement of the expenses incurred by the respondent or were paid to him in advance,
(III)the amount of Rs. 29,793.00 was claimed by the company as its expenditure but was disallowed,
(IV)that in pursuance of an information received by the Income-tax Officer proceedings were started under section 34(1) of the Act, 1922 in respect of assessment of the respondent as an individual for the assessment year 1957-58 whereby this amount of Rs. 29,793.00 was added to the income of the respondent and he was re-assessed and called upon to pay tax on the amount which had escaped assessment,
(V)the Respondent 1s a Director of M/s Hari Brothers (Private) Ltd. but was not a full time Director of that Company, and
(VI)that in his foreign tour the respondent did not act for or do any work for the company and that he and his wife had a pleasure trip and the payment in question was a gratuitous payment by the company to him.
(3) Mr. A. N. Kirpal, the learned counsel for the Revenue has urged two points before us. His contentions are (a) that on the amitted facts the amount of Rs. 29,793.00 must be regarded as income of the respondent within the meaning of Section 2(6C) (iii) of the Act of 1922; and (b) that the receipt of Rs. 29,793.00 in the hands of the respondent being a receipt arising from business or the exercise of a profession, vocation or occupation would not attract the exemption contemplated by section 4(3)(vii) of the Act. The contention of Mr. S. K. Mitra, the learned counsel for the Respondent 1s that neither is this amount income as contended by Mr. Kirpal and that even if it is income it was not derived by the exercise of a profession, vocation or occupation and must be treated to be of a casual and non-recurring nature and so would be exempt from taxation.
(4) Whether the respondent received the sum of Rs. 29,793.00 as an advance of by way of reimbursement is not very material because what is apparent is that this amount was paid by the company to the respondent. It has already been noticed that the amount was paid to the respondent pursuant to a resolution of the company calling upon its Director to take a foreign tour and by which the company had agreed to pay for it. The question that arises is whether the amount so paid to the respondent would be his income. We have no difficulty in holding that on a construction of section 2(6C) (iii) the said amount would be income of the respondent. We may read section 2(6C) here, which is in the following words:-
“INCOME”includes-
(I)dividend;
(II)the value of any perquisite or profit in lieu of salary taxable under section 7;
(III)the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by any other person who has a substantial interest in the company that is to say, who is concerned in the management of the business of the company, being the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent of the voting power), and any sum paid by any such company in respect of any obligation which but for such payment would have been payable by the director or other person aforesaid;
(IV)any sum deemed to be profits under the second proviso to clause (vii) of sub-section (2) of section 10, and any sum deemed to be profits and gains under sub-section (2A) of that section or under sub-section (5) of section 12;
(V)any sum deemed to be profits and gains of business, profession or vocation under sub-section (5A) of Section 10;
(VI)any capital gain chargeable under section 12B;
(VII)the profits and gains of any business of insurance carried on by a mutual insurance association or by a co-operative society computed in accordance with rule 9 in the schedule;”
(5) On a reading of this section it is clear that the legislature has extended the meaning of the word “income” and has not let it remain restricted to the common notion of that word. In a taxing statute definitions have to be strictly construed and if on a reading of the relevant provision it is clear that the legislature wished to include in the definition concepts different from the ordinary notions, the meaning as intended by the relevant provision would have to be given to the word sought to be defined. From a reading of the above provision there is ‘no manner of doubt that the legislature contemplated inclusion of various forms of benefits whether received in cash or otherwise to be included in the term ‘income’. Sub-clause (iii) speaks of the value of any benefit or perquisite to be construed as income. This value may be in terms of cash or in enjoyment. Even a benefit or perquisite enjoyed can be translated in term of money so long as that benefit or perquisite is of material things of life. That the respondent received cash benefit is obvious and that is the value of the benefit he must be held to have received when he undertook the foreign tour. The amount received for the foreign tour under-taken by him cannot be regarded as a perquisite in as much as the term “perquisite” generally connotes something which an employee receives from the employer in addition to salary.
(6) The respondent was a part-time Director and it is nobody’s case that he was paid any salary. The plain perusal of sub-clause (iii) of Section 2 (6C) would show that any benefit or perquisite obtained from a company by a Director would answer to the description of income. It is immaterial whether the benefit or perquisite is convertible into money or not. Although the amount in question paid to the respondent may not amount to a perquisite we have no doubt in our mind that the amount received by him was a benefit received by the respondent from the company of which he was a Director. As such the amount constituted income in his hands. We are not impressed by the argument of Mr. Mitra that the benefit obtained by a Director from the company can be considered to be income only if it is expressly mentioned that the benefit was being given to him because of his being a Director. The definition makes it manifest that it is enough that a Director of a company receives a benefit from the company and it is not essential to expressly say so that the benefit was being conferred upon him to enable him to act as a Director. In the present case all the same we find that the respondent received the benefit because of his being a Director of the company, which, as its name would show, is a private company. Further, had the company not paid the amount to the respondent he would have had to meet the expenses of the foreign tour himself, which admittedly he did not. The obtaining of the benefits, in these circumstances, clearly brings this benefit within the ambit of the definition of “income”.
(7) Mr. Mitra invited our attention to a number of cases to which we may now advert. He first referred to the decision in Iv Tax Cases 489. In this case the question that arose was that when grants are made to a clergyman in augmentation of the income of his benefices from a sustentation fund the said amount would be assessable in the hands of the clergyman as profits accuring, to him by reasons of his office. The relevant provision of the statute in England provided that the duties granted in the schedule shall he assessed and charged On persons respectively having, using or exercising the office or employments of profit mentioned in Schedule to the British Income-tax Act, 1842 and further laid down that annuities, pensions or stipends mentioned in the same schedule shall be payable for all salaries, fees, wages, prequisites or profits whatsoever accuring by reason of such offices, employments or pensions. Construing those provisions the Master of Rolls held that the amount paid to the Clergyman was by virtue of his office and so assessable. Accordingly, this case does not help the respondent at-all.
(8) The next case referred to by Mr. Mitra was the decision reported in V Tax Cases 347. The House of Lords observed that where a sum of money is given to an incumbent substantially in respect of his services as incumbent it accrues to him by reason of his office. On the facts of that case “Easter offerings” given to the Vicar by parishioners in responsento an appeal made by the Bishop L4HCD/70-6 were held to be offerings assessable to income-tax because the Vicar received the amount by virtue of his being a Vicar. This case also does not help the respondent because it is obvious that had the respondent not been a Director the amount paid to him would not have bean so given.
(9) Reference was also made by Mr. Mitra to the decisions reported in 36 Tax Cases Page 1 and 14 Tax Cases page 14 which are decisions on the same ratio as the decisions discussed by us above and do not help the respondent.
(10) Reference, however, was also made to the decisions in 14 Tax Cases 1, 7 Tax Cases 372, 11 Tax Cases 625 and 16 Tax Cases 505. In these cases the payments made to the assesseds were held not to be income but; the ratio was the same as in the earlier cases and that is that if payment was made to the person by virtue of the office he held or the profession that he carried on that will be assessable to tax but if the payment was made either gratuitously or by way of reward for services rendered but was not a profit accruing to the assessed in respect of his office or employment then the same could not be regarded as income. The rule laid down in all these makes it clear that the payment as made has to be taken into consideration and not the utilisation of that payment or how that is considered to be by the person receiving it. The treatment of the payment by the assessed is wholly immaterial. The respondent was paid by the company as a Director and so on a plain reading of sub-clause (iii) of sub-section (6C) of Section 2 the amount must be held to be income in the hands of the respondent.
(11) Mr. Mitra urged that as observed by Lord Chancellor Halsbury in Tennant v. Smith (3 Tax Cases 158) a natural consideration must be given to the words in a taxing statute and unless the benefit alleged to have accrued to the assessed is clearly a pecuniary benefit as cannot form part of taxable income. In the present case pecuniary benefit has accrued to the respondent by his receiving the amount but even otherwise the statute makes it clear that the benefit to be added to the income may even be such which is not convertible in terms of money. Accordingly, we negative the contentions raised on behalf of the respondent that the receipt of the amount was not a benefit within the meaning of section 2(6C) (iii).
(12) Mr. Mitra also contended that on a reading of sub-clause (iii) of sub-section (6C) of Section 2 the words “who has a substantial interest in the company” in Clause (iii) of sub-section (6C) of Section 2 qualified not only “any other person” but also the words “A Director”. A plain reading of the provision does not justify this interpretation. In a taxing statute the obvious meaning has to be taken note of and the words should not be stretched.
(13) Having held that the benefit in question would be income it has to be seen whether the same is taxable in the hands of the respondent. All income received by a person is not taxable. The charging section in the Act of 1922 are Sections 3 and 4 and only such income as has been provided to be taxable by these provisions can be assessed to tax. Section 4 of the Act of 1922 clearly lays down that the total income of any previous year of any person includes all income, profits and gains from whatever source they derived would be taxable subject, however, to certain exceptions. The exceptions of which the respondent seeks to take benefit is contained in Section 4(3C)(vii) and the argument is that the receipt of this amount by the Respondent 1s not by way of exercise of any profession, vocation or occupation. To be the Director of a Company is obviously neither a profession or a vocation. The question that arises is whether it can be regarded as an occupation. Mr. Mitra referred to the decision of the Supreme Court in Mahesh Anantrai Pattani and another v. Commissioner of Income-tax, Bombay North (XLI I.T.R. 481) and on the analogy of the rule laid down in that case urged that the amount received by the respondent was not by virtue of the exercise of an occupation. In our opinion the ratio of that decision is not attracted at all. The word ‘occupation’ has been differently construed. We may refer here to the Corpus Jurisdiction Secundum which gives the following meaning to the word :- “The word “occupation” also is employed as referring to that which occupies time and attention; a calling, or a trade; and it is only as employed in this sense that the word is discussed in the following paragraphs. There is nothing ambiguous about the word “occupation” as it is used in the sense of employing one’s time. It is a relative term, in common use with a well-understood meaning and very broad in its scope and significance. It is described as a generic and very comprehensive term, which includes every species of the genus, and compasses the incidental, as well as the main, requirements of one’s vocation, calling or evocation business. The word ‘occupation’ is variously defined as meaning the principal business of one’s life; the principal or usual business in which a man engages; that which principally up one’s time, thought, and energies; that which occupies or engages the time and attention; that particular business. profession, trade or calling which engages the time and efforts of an individual; the employment in which one engages, or the vocation of one’s life; the state of being occupied or employed in any way; that activity in which a person, natural or artificial, is engaged with the element of a degree of permanency attached.”
(14) Thus we find that in contexe in which the word is used it has been differently construed and differen decisions from which the meaning of this word has been incorporated in Corpus Jurisdiction Secundum. A person may have a whole time occupation or a parttime occupation. He may follow one particular occupation to earn his livelihood but yet may employ part of his time and energy in doing something else also. If he does so, then the other matter in which he engages and devotes time and effort would be an occupation though such an occupation would be quite distinct from his employment, vocation, trade, profession, business or calling. The legislature when it deals with the words business, profession, evocation or occupation intended to bring in all aspects of a person’s activity as distinct from a chance pursuit. We are, therefore, hold that the amount received by the respondent was in the exercise of an occupation. In this view of the matter whether the receipt was a casual or non-recurring receipt becomes immaterial. It is only casual and non-recurring receipts which an assessed receives otherwise than by pursuit of his business, profession, evocation or occupation which fall within the exception contemplated by section 4 (3C) (vii) and not others. So, the consideration as to whether the receipt in question was casual and non-recurring does not arise.
(15) In the view that we have taken our answer to the question posed in the statement of case would be as follows :- "INthe facts and in the circumstances of this case the amount of Rs. 29,793.00 was liable to be taxed in the assessed's hands." (16) In the circumstances of the case we would leave the parties to bear their own costs.