JUDGMENT Rastogi, J.
1. The Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following questions for the opinion of this court:
" 1. Whether, on the facts and in the circumstances of the case, the receipt of the car in question was ' a benefit' within the meaning of Section 28(iv) of the Income-tax Act, 1961 ?
2. Whether, on the facts and in the circumstances of the case, the assessee was carrying on a profession within the meaning of Section 28(iv) of the Income-tax Act ? "
2. This reference relates to the assessment year 1965-66. The assessee derives income from sale of books. He has got some agricultural holding and he also gives discourses on vedanta and for that purpose undertakes tours. In the relevant previous year the assessee made an investment of Rs. 16,100 in the purchase of a car and it was registered in his name. His claim was that the price paid for the car had come from his followers by way of contributions and for that purpose an affidavit of Sri C.P. Singhal was filed before the ITO. It was claimed by Sri Singhal that he had collected certain amounts from different persons and had deposited the same in his account in the co-operative bank (Rs. 2,000 on June 11, 1963, and Rs. 8,100 on November 7, 1964, and Rs. 6,000 was received from Sri Nand Kishore, Vakil of Kanpur), and it was from those contributions that the Car was purchased for the assessee. His statement as well was recorded by the ITO. The ITO, however, held that since donations were made by the followers of the assessee, who had been benefited by his preachings, these receipts were for the exercise of the vocation carried on by the assessee and hence were taxable in his hands. On this view he included this amount of Rs 16,100 in the income of the assessee.
3. The assessee appealed but remained unsuccessful and took up the matter in further appeal before the Appellate Tribunal. The Appellate Tribunal accepted the assessee's case and held that instead of paying travelling expenses, the disciples provided the car to him for the purpose of his travels and hence the amount contributed by them for that purpose did not amount to the assessee's income. It has also been held that the car is not the assessee's personal or his family's property. The addition was, accordingly, deleted and hence at the instance of the Commissioner the questions, mentioned above, have been referred to this court.
4. According to Sri Ashok Gupta, learned counsel for the department, profession" includes "vocation" and that being so it should be taken that the assessee is carrying on the vocation of a vedanta preacher and, as such, under Section 28(iv) of the I.T. Act, 1961, hereinafter referred to as "the Act", the value of such benefit would be taxable in his hands. On the other hand, it was urged before us by Sri A. Sinha, learned counsel for the respondent-assessee, that there was no question of any benefit arising to the assessee because the car was given to him by his disciples to cover his travelling expenses. He undertakes tours to various places for preaching vedanta and instead of defraying the travelling expenses, his disciples provided a car for him to facilitate his travelling. Thus, it was a case of mere relief from incurring expenditure on going from one place to another for preaching vedanta. It was emphasised that as per the finding given by the Appellate Tribunal the car does not belong to the assessee or his family. It belongs collectively to his disciples. According to Sri Sinha, Clause (iv) of Section 28 is not attracted because the assessee is not carrying on any profession or vocation of preaching vedanta.
5. Two questions, thus, fall for our consideration and they are embraced in the questions referred. The first question would be as to whether the assessee is carrying on a vocation of preaching vedanta and the second question that arises is as to whether the purchase of the car by the disciples of the assessee would amount to a benefit within the meaning of Section 28(iv) of the Act and taxable as such.
6. Section 28 of the Act provides that tax is payable by an assessee in respect of the profits and gains of business or profession. Section 2(36) says that "profession" includes "vocation". "Business" is defined in Sub-section (13) of this section as including "any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture ". The expression " profession " thus involves the idea of an occupation requiring purely intellectual skill or manual skill controlled by the intellectual skill of the operator, as distinguished from an occupation or business which is substantially the production or sale, or arrangements for the production or sale, of commodities. " Profession " is a word of wide import and includes vocation which is only a way of living and a person can have more than one vocation, and the vocation need not be for a livelihood nor for making any income nor need it involve a systematic and organised activity. The import of this expression came up for consideration before the Supreme Court in P. Krishna Menon v. CIT [1959] 35 ITR 48 (SC). In that case after his retirement from Government service the assessee engaged himself in teaching vedanta philosophy, and one of his disciples who used to come from England at regular intervals to the place where the assessee lived and stayed there for a few months at a time and attended his discourses, transferred his entire balance standing to his credit in his account at Bombay to the account of the assessee and thereafter from time to time put in further sums into the assessee's account in Bombay. The question arose whether the receipt from the disciple constituted the assessee's income, liable to income-tax. The facts found were that the assessee was studying vedanta philosophy himself and was imparting the knowledge acquired by him as a result of his studies to such as cared to come and imbibe it. There was no evidence to show that he had made any condition that he would impart such knowledge only to those who were prepared to pay for it. In other words he was teaching his disciples vedanta without any motive or intention of making a profit out of such activity. On these facts, the Supreme Court held (p. 51) :
" We find no difficulty in thinking that teaching is a vocation if not a profession. It is plainly so and it is not necessary to discuss the various meanings of the word ' vocation ' for the purpose or to cite authorities to support this view. Nor do we find any reason why, if teaching is a vocation, teaching of vedanta is not. It is just as much teaching, and, therefore, a vocation, as any other teaching. "
7. The mere fact that the teaching of vedanta was a matter of religion would not mean that it was not carrying on of a vocation. The facts found in the present case are that the assessee was giving discourses on vedanta philosophy and there is no evidence to show that he had made it a condition that he would give such discourses only to those who were prepared to pay for it. It other words, he was giving such discourses without any motive or intention of making a profit out of such activity. None the less this giving of discourses was a vocation and the raising of the contributions for purchasing a car for the assessee by his disciples would have to be taken as having been made in consideration of the teaching imparted by him In P. Krishna Menon's case [1959] 35 ITR 48 (SC), the imparting of the teaching by the assessee was held to be the causa causans for the making of the gifts by the foreign disciple and was not merely a causa sine qua non and the same was the position in the instant case that the giving of the discourses by the assessee was the causa causans for the raising of the contributions by his disciples and the purchase of the car by them for him. On this view, I do not think that the submission made on behalf of the assessee that he was not carrying on a vocation and the purchase of the car for him by his disciples was not for the benefit which accrued to them from the discourses of the assessee, can be accepted. It will be a mere euphemism to say that the car was provided as a mere relief from expenses or for going from one place to an >ther for giving the discourses. The decision of a Full Bench of this court in Major A.U. John, In re [1938] 6 ITR 434 and of the Gujarat High Court in Acharya D.V. Pande v. CIT [1965] 56 ITR 152 would not be. of much avail. In Major A.U. John's case [1938] 6 ITR. 434 (All), while considering the import of the word " income " under the 1922 Act, it was observed that the element of periodical receipt or regularity or expected regularity of monetary return is an essential ingredient of " income ". In that case, the assessee had been permitted by the civil court in a certain litigation to act as auctioneer and was allowed to deduct a certain percentage from the amount which he had to pay to the court. The question was as to whether the Income so received was taxable under Section 4(3Xvii) of that Act. On a reference, the view taken by this court was that that receipt was not income in character because, in fact, it was no receipt but was the granting of a mere relief and even if the assessee be regarded as having received that amount, the receipt was not arising from business or the exercise of a profession or vocation and was of a casual and non-recurring nature and was, therefore, exempt from income-tax under Section 4(3)(vii) of the Act. In the instant case, of course, the case taken by the assessee before the AAC and the Appellate Tribunal was that this receipt was of a casual and non-recurring nature. This submission was repelled by the AAC on the view that the finding of the ITO that the followers of the assessee had been benefited by the speeches and sadhana and for that they had presented the car to him, had not been rebutted. The Appellate Tribunal, on the other hand, though it posed this question, did not give any direct finding on it. It was conceded before the Tribunal that the assessee does give discourses on vedanta on account of which he has numerous followers spread over almost the entire Hindi region and that " gave an urge to his disciples to collect funds to provide a car for him ". The contention advanced by the assessee himself was that providing a car for travelling was not the same thing as giving of money in cash and in any event the assessee was not carrying on any profession. The Appellate Tribunal did not record any finding as to whether or not the assessee was carrying on any profession and accepted the assessee's claim on the view that the disciples, instead of paying for the assessee's travelling, provided a car to him and that it was not his personal or family's property and the case was, thus, distinguishable from that of P. Krishna Menon [1959] 35 ITR 48 (SC), and in their opinion so far as the assessee is concerned, it was not an income at all. On the facts found we are not inclined to agree that the raising of the contributions for the purchase of car or the presentation of a car was receipt of a casual and non-recurring nature. The decision in B. Malick v. CIT [1968] 67 ITR 616 (All) and Mahesh Anantrai Pattani v. CIT [1961] 41 ITR 481 (SC) would have no application to the facts of this case. In B. Malik's case [1968] 67 ITR 616 (All), payment of honoraria to the assessee when he was the Chief Justice of this court was held to be a casual and non-recurring receipt not arising from the exercise of a profession, vocation or occupation. In Mahesh Anantrai Pattani [1961] 41 ITR 481 (SC), it was a case of payment as a personal gift for the personal qualities of the assessee and as a token of personal esteem, and was held not taxable. In the instant case, as noted above, in view of the fact that the word "profession" includes vocation and the teaching of vedanta or giving regular discourses on vedanta philosophy amounts to carrying on a profession, the benefit accruing to the assessee during the course, and as a result, of that activity would certainly not be in the nature of the granting of a mere relief. In our opinion, therefore, this decision is clearly distinguishable. Similarly, the decision in D.V. Pande [1965] 56 ITR 152 (Guj) proceeded on different set of facts. In that case, the assessee was the acharya (spiritual preceptor) for the time being of the diocese of a religious institution. The diocese possessed temples and other properties and received income therefrom. The followers of the acharya paid a permanent religious tax to the institution, and, in addition to these, the followers paid to the acharya a voluntary contribution in the form of salutation tax and present. The acharya agreed to treat such contributions as the income of the trust in return for a permanent personal allowance and in a scheme framed by the High Court for the administration of the trust, it was provided, inter alia, that the acharya shall be entitled to set aside for his personal use a sum of Rs. 2,000 per month from the trust income ; and further that the expenses of his household, and the customary expenditure on official tours shall be defrayed by the institution. The amount set aside for the personal use was held taxable but the expenditure incurred by the institution for his household and other customary purposes was not held as a benefit representing money's worth, i.e., something which could be turned to pecuniary account.
8. Apart from the distinction on facts, a specific provision has now been made in the Act which makes such benefits chargeable to tax Section 28(iv) now provides:
" 28. The following income shall be chargeable to income-tax under the head ' Profits and gains of business or profession ',--...
(iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. "
9. There was no corresponding provision in the 1922 Act, and hence this decision would not now be applicable even on similar set of facts.
10. This leads us to the consideration of the second question. We have extracted above Clause (iv) of Section 28. It was inserted by the Finance Act, 1964, with effect from 1st April 1964. As noted above it provides that the value of any benefit or perquisite, whether convertible into money or not, arising from the business or the exercise of a profession, is chargeable as part of the profit under this Act. It is deemed to be income under s, 2(24)(va). Sub-section (24) defines " income ". It is an inclusive definition and by virtue of Clause (va) the value of any benefit or perquisite taxable under Clause (iv) of Section 28 shall be included in the income. The question which arises, therefore, is as to whether this particular receipt in kind, i.e., the car, by the assessee, would be a benefit within the meaning of these provisions. In Rendell v. Went (Inspector of Taxes) [1965] 58 ITR 73 (HL), the import of the word " benefit " with reference to Sections 160 and 161(1) of the I.T. Act, 1952 (of U.K.), had come up for consideration. In that case, a motor car belonging to a company while being driven by a director of the company on the company's business, met with an accident and a pedestrian was killed. The director was charged with causing death by reckless or dangerous driving. His defence was undertaken by the company and it amounted to £ 641. The director was acquitted and in his assessment to income-tax this amount was sought to be taxed as benefit accruing to him within Section 161(1) of the I. T. Act, 1952 (U.K.). Ultimately, the matter went to the House of Lords and the view taken was that the expenditure amounted to a benefit, the money value of which was liable to tax in his hands. The contention that since it suited and was to the advantage of the company to make that expenditure, it was not advantageous to the director, was repelled and it was held that the money spent by the company " bought nothing except the appellant's defence, no part of it was spent on something that did not benefit him ".
11. Before the Delhi High Court in CIT v. Nar Hari Dalmia [1971] 80 ITR 454, the import of this word came up for consideration with reference to Sub-clause (iii) of Clause (6C) of Section 2, corresponding to sub-cl. (iii) of Sub-section (24) of Section 2 of the 1961 Act, and it was observed (pp. 458, 459):
" 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 terms of money so long as that benefit or perquisite is of material things of life. "
12. In the instant case as well, the benefit was of a material thing of life and the value thereof certainly would be deemed to be income under Clause (va) of Section 2(24) and, as such, that value would be liable to be treated as income from vocation under Section 28(iv).
13. Before we part with this aspect of the case we would like to mention that it is now well settled that in determining whether or not a receipt is liable to be taxed the legal character of the transaction which is the source of the receipt cannot be ignored. For this purpose, it is not proper to proceed on what is called the substance of the matter. [See CIT v. B.M. Kharwar [1969] 72 ITR 603 (SC)]. Now, the legal character of the transaction is that this car was purchased by some disciples of the assessee for his use in consideration of the teachings imparted to them by the assessee on vedanta philosophy. It would clearly be a benefit which would be deemed to be an income under Section 2(24Xva) and the value thereof would be taxable in the hands of the assessee under Section 28(iv). The finding of the Appellate Tribunal that the car is neither the assessee's personal nor his family property has no relevance in this behalf.
14. In view of the foregoing discussion we, therefore, do not agree with the Appellate Tribunal and hold that the assessee was carrying on a profession within the meaning of Section 28(iv) of the Act and the receipt of the car was a benefit accruing to him. The next question that now arises is what should be taken to be the value of this benefit and though,--even Sri Ashok Gupta, counsel for the department, stated before us that the matter of quantification of the value of this benefit may be referred back to the Appellate Tribunal; we do not think that any apportionment is called for. There is no dispute that the entire amount of Rs. 16,100 contributed by some of his disciples was spent on purchase of this car. It is registered in the name of the assessee. It may or may not belong to him personally or to his family. But the fact is that besides him and his family no one else is getting any benefit out of it. The question of apportionment can only come into play where, of the total sum spent, a part can be identified as having been spent on something that was not a benefit or facility to the recipient concerned. Such was the view taken in Rendell v. Went [1965] 58 ITR 73 (HL). Thus, the amount which has been spent in the purchase of the car would have to be treated as the value of the benefit. After all, it does not reduce the value of the present to say that the recipient could not or would not have bought it for himself. In our opinion, therefore, the entire value of the car is liable to be treated as the value of this benefit.
15. Our answers to both the questions referred, therefore, are in the affirmative, in favour of the revenue and against the assessee. The revenue is entitled to its costs which we assess at Rs. 200 and counsel fee in the same figure.