Case: P. Krishna Menon Vs. The Commissioner Of Income-Tax, Mysore, Travancore-Coch

1. The appellant who was a Superintendent of Police in the service of the former Travancore State, retired sometime in 1940. After retirement he was spending his time in studying Vedanta philosophy and expounding the same to such persons as were keen on understanding it. He soon gathered about him a number of disciples, one of whom was J. H. Levy of London, U. K. Levy along with others used to receive instructions in Vedanta from the appellant. He used to come to Travancore from England at regular intervals and stay there for a few months at a time and attend the discourses given by the appellant and so had the benefit of his teachings on Vedanta2. Levy had an account in Lloyds Bank at Bombay. On December 13, 1941, Levy transferred the entire balance standing to his credit in this account amounting to Rs. 2,41,103-11-3, to the credit of an account which he got the appellant to open in his name in the same bank. Thereafter, from time to time Levy put in further sums into the appellants aforesaid account in Lloyds Bank, Bombay. It appears that the payment so made up to August 19, 1951 amounted to about Rs. 4,50,000. From time to time the appellant got moneys transferred from his account at the Lloyds Bank, Bombay, to his account in a bank at Trivandrum in Travancore3. This appeal arises out of orders for assessment to income-tax passed against the appellant for the assessment years 1122, 1123 and 1124, all according to the Malayalam era. The respective accounting periods according to the Gregorian calendar were from August 17, 1945, to August 16, 1946, August 17, 1946, to August 16, 1947, and August 17, 1947, to August 16, 1948. It appears that during these periods Levy had deposited in the appellants account at Lloyds Bank in Bombay the following respective sums: Rs. 13,304, Rs. 29,948 and Rs. 19,983. During the same periods the appellant had obtained transfers of the following respective sums from his Bombay account to his Trivandrum account: Rs. 81,200, Rs. 47,000 and Rs. 37,251. The Income-tax Officer, Trivandrum, assessed the appellant to tax on the latter amounts as foreign income i.e., income arising in India, and brought into Travancore State in the relevant periods. We are not concerned in this case with the assessment made on other income of the appellant. The appellant appealed from these assessment orders to the Appellate Assistant Commissioner who consolidated them into one appeal. The Appellate Assistant Commissioner dismissed the appeal and confirmed the orders of the Income-tax Officer. The appellant then went up in appeal to the appellate Tribunal but that appeal also failed4. The appellant thereafter obtained an order from the Tribunal referring the following questions to the High Court of Travancore-Cochin for decision :"(i) Whether the aforesaid receipts from John H. Levy constitute income taxable under the Travancore Income-tax Act, l121? and(ii) Whether there are materials for the Tribunal to hold that the deposits into the assessees bank account in Bombay by John H. Levy from 1941 as aforesaid represented income that accrued to the assessee outside Travancore State?"The High Court answered the first question in the affirmative. It however answered the second question in favour of the appellant, holding that he was carrying on a vocation or occupation in that State and the income derived therefrom should be considered as having arisen in Travancore, and that therefore the appellant was liable to be taxed not on the amounts which he brought into Travancore but on the amounts which had been paid to the credit of his account at Bombay by Levy during the relevant periods. The appellant has now come up to this Court in appeal by special leave against the answer given by the High Court to the first question.

Reasoning: 8. 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. It is said that in teaching Vedanta the appellant was only practising religion. We are unable to see why teaching of Vedanta as a matter of religion is not carrying on of a vocation. In any case the question does not really arise, for whether the appellant was, in teaching Vedanta, practicing religion, is of course a finding of fact. It may be that Vedanta could be taught as a practice of religion but it could of course also be taught as any other philosophy or school of thought. The statement of case in this case does not contain any finding that in teaching Vedanta the appellant was practising religionWe think that these contentions lack substance.We do not appreciate the significance of saying that in order to become a vocation an activity must be organised. If by that a continuous, or as was said, a systematic activity, is meant, we have to point out that it is well known that a single act may amount to the carrying on of it business or profession.It is unnecessary to discuss this question further as we find no want of system or continuity in the activity of the appellant. He had gathered a large number of disciples around him and was instructing them in Vedanta regularly. Levy came all the way from England at regular intervals to obtain such instructions. All this clearly indicates organisation and system10. Again, it is well established that it is not the motive of the person doing an act which decides whether the act done by him is the carrying on of a business, profession or vocation. If any business, profession or vocation in fact produces an income, that is taxable income and none the less because it was carried on without the motive of producing any income.This, we believe, is too well established on the authorities now to be questioned4. We find it impossible to hold in this case that the payments to the appellant had not been made in consideration of the teaching imparted by him. Levy admitted that he had received benefit from the teaching of the appellant. It is plain to us that it was because of the teaching that the gift had been made. It is true that Levy said that he made the gifts to mark his esteem and affection for the appellant. But such emotions and therefore the gifts, were clearly the result of the teaching imparted by the appellantWe have no doubt in this case that the imparting of the teaching was the causa causans of the making of the gift; it was not merely a causa sine qua non.The payments were repeated and came with the same regularity as Levys visits to the appellant for receiving instructions in Vedanta. We do not feel impressed by Mr. Sastris contention that the first payment of Rs. 2,41,103-11-3 was too large a sum to be paid as consideration. In any case we are not concerned in this case with that payment13. In the view that we take, namely, that the payments with which we are concerned, were income arising from the vocation of the appellant as a teacher of Vedanta, no question of exemption under S. 4(3) (vii) of the Act arises. In order that a payment may be exempted under that Section, it has to be shown that it did not arise from the exercise of a vocation.