Case: Commissioner Of Expenditure Tax, Andhra Pradesh Vs. Shri Pvg Raju, Rajah Of Vizianagaram

the Purpose of the business, profession, vocation, or occupation carried on by him or for the purpose of earning income from any other source;(j) any expenditure incurred by the assessee by way of, or in respect of, any gift, donation or settlement on trust or otherwise for the benefit of any other person ........"6. The assessee was party chairman and politics was undoubtedly his profession or occupation, it being admitted that his interest in politics was not casual nor sporadic but abiding and ambitious.7. The contention of the respondent which met with success before the High Court was that the election expenses of other candidates set up by him as chairman of the socialist party, loosely described as " party expenditure ", were incurred wholly and exclusively for the purpose of his " profession " or " occupation ". So, the first point which arrests our attention in examining this contention is as to whether politics of the socialist brand or otherwise is a profession or occupation.8. There can hardly be any doubt that it is either, or both. Harold Laski treated politics as a science and wrote his well-known book on the Grammar of Politics, but the art of politics at a practical level has also been the subject of comment and has been praised and denounced on the basis that it is a profession. To Gandhiji it is sacred as religion. In Lincoln it rises to noble heights of statesmanship. Lenin, Nehru and a galaxy of other great visionaries and makers and moulders of the modern world have dedicated themselves to politics as a profession. Of course, in its vulgar and vicious manifestations, this occupation has been regarded by literary giants like Dr. Johnson as " the last refuge of a scoundrel ". Robert Louis Stevenson has used barbed words : " Politics is perhaps the only profession for which no preparation is thought necessary (Familiar Studies of Man and Books, " Yoshida-Torajiro "). George Benard Shaw uses stinging language in Major Barbara: " He knows nothing; and he thinks he knows everything. That points clearly to a political career." It is thus clear, without reference to the wealth of case law relied on by the High Court, that politics has been a profession and, indeed, under modern conditions in India, perhaps the most popular and uninhibited occupation with--its perils, of course. Law cannot take leave of realities and, therefore, section 5(a) must bear the construction that politics is a profession or occupationThe next question is whether the expenditure incurred by the assessee for the election of candidates set up by him as chairman of his party can be legitimately regarded as incurred " wholly and exclusively " for the purpose of his profession or occupation. We have grave doubts whether meeting the expenses of other candidates can be fulfilment of his professional expenses, but this question deserves no deeper probe for the simple reason that section 5(j) embraces the expenditure as it does answer the description of a donation. When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. A gift or gratuitous payment is, in simple English, a donation. We do not require lexicographic learning nor precedential erudition to understand the meaning of what many people do every day, viz , giving donations to some fund or other, or to some person or other. Political donations are not only common, but are assuming deleterious dimensions in the public life of our country. It is, therefore, clear that when this Raja, assessee, gave money to the candidates of his party for them to meet their election expenses, he made donations. Even if he met their election expenditure, it was money gratuitously given on their behalf and, therefore, amounted to donation. Without straining language, we reach the natural conclusion that what the respondent expended for the other candidates during the elections was " donation " in the language of the law. There is no suggestion nor evidence that any material return was in contemplation when he spent these sums. Being a politically important man with plenty of money and vitally interested in boosting his partys standing in the State, he donated liberally for candidates set up by the party. In this view section 5(j) applies to these donations which earn exemption from the expenditure-taxThe next item relates to sums given to the Socialist Party. It is reasonable to assume that the amount, paid to the office-bearers of the party were without an eye on any material return other than royalty or gratitude. They were outright gifts. Indeed, many rich people out of diverse motives make donations to political parties. The hope of spiritual benefit or political goodwill, the spontaneous affection that benefaction brings, the popularisation of a good cause or the prestige that publicised bounty fetches--these and other myriad consequences or feelings may not mar a donation to make it a grant for a quid pro quo. Wholly motiveless donation is rare, but material return alone negates a gift or donation. We need not investigate the propriety of political donations " unlimited " and often invisible. All that we need consider is whether such sums are gifts and donations or are non-gratuitous payments with a tag of return. We have no doubt that on the question as framed, and on the facts and circumstances present, these sums were paid purely as gifts and donations to his party by the repondent. It is not surprising either, because he was the chairman of the said party, had a long and liberal purse from which to draw and a large circle of support to build up in the long run.9. The inevitable conclusion from our discussion is that both the heads of expenditure fall under section 5(j) of the Act and, therefore, flow out of the assessable zone.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]There can hardly be any doubt that it is either, oris thus clear, without reference to the wealth of case law relied on by the High Court, that politics has been a profession and, indeed, under modern conditions in India, perhaps the most popular and uninhibited occupation with--its perils, of course. Law cannot take leave of realities and, therefore, section 5(a) must bear the construction that politics is a profession or occupationThe next question is whether the expenditure incurred by the assessee for the election of candidates set up by him as chairman of his party can be legitimately regarded as incurred " wholly and exclusively " for the purpose of his profession or occupation. We have grave doubts whether meeting the expenses of other candidates can be fulfilment of his professional expenses, but this question deserves no deeper probe for the simple reason that section 5(j) embraces the expenditure as it does answer the description of a donation. When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. A gift or gratuitous payment is, in simple English, a donation. We do not require lexicographic learning nor precedential erudition to understand the meaning of what many people do every day, viz , giving donations to some fund or other, or to some person or other. Political donations are not only common, but are assuming deleterious dimensions in the public life of our country. It is, therefore, clear that when this Raja, assessee, gave money to the candidates of his party for them to meet their election expenses, he made donations. Even if he met their election expenditure, it was money gratuitously given on their behalf and, therefore, amounted to donation. Without straining language, we reach the natural conclusion that what the respondent expended for the other candidates during the elections was " donation " in the language of the law. There is no suggestion nor evidence that any material return was in contemplation when he spent these sums. Being a politically important man with plenty of money and vitally interested in boosting his partys standing in the State, he donated liberally for candidates set up by the party. In this view section 5(j) applies to these donations which earn exemption from the expenditure-taxThe next item relates to sums given to the Socialist Party. It is reasonable to assume that the amount, paid to the office-bearers of the party were without an eye on any material return other than royalty or gratitude. They were outright gifts. Indeed, many rich people out of diverse motives make donations to political parties. The hope of spiritual benefit or political goodwill, the spontaneous affection that benefaction brings, the popularisation of a good cause or the prestige that publicised bounty fetches--these and other myriad consequences or feelings may not mar a donation to make it a grant for a quid pro quo. Wholly motiveless donation is rare, but material return alone negates a gift or donation. We need not investigate the propriety of political donations " unlimited " and often invisible. All that we need consider is whethersuch sums are gifts and donations or are non-gratuitous payments with a tag of return.We have no doubt that on the question as framed, and on the facts and circumstances present, these sums were paid purely as gifts and donations to his party by the repondent. It is not surprising either, because he was the chairman of the said party, had a long and liberal purse from which to draw and a large circle of support to build up in the longinevitable conclusion from our discussion is that both the heads of expenditure fall under section 5(j) of the Act and, therefore, flow out of the assessable zone.