THE COMMISSLBNER OF INCOME-TAX, PUNJAB versus SHRI THAKUR DAS BHARGAVA, ADVOCATE, HISSAR.

Citation: [1961] 1 S.C.R. 75 · Decided: 27-07-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

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i 's.C.R. SUPREME COURT REPORTS 
75 
THE COMMISSlbNER OF INCOME-TAX, 
PUNJAB 
v. 
SHRI THAKUR DAS BHARGAVA, ADVOCATE, 
I HISSAR. 
(S. K. DAS, M. HIDAYATULLAH and,J. C. SHAH, JJ.) 
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· 
Income Tax-Professional income-Lawyer accepting case on 
condition of clients' paying money for charity-Money paid to lawyer 
and charitable trust created-Whether amount received is professional 
income. 
· 
The assessee, an advocate, accepted a case on condi~ion that 
the clients would provide him with Rs. 40,000 for chai;itable 
purpos~s and that he would create a public charitable trust with 
the money. }he clients gave the assessee Rs. 3z,500 and ·he crea-
ted a trust therewith. The assessee claimed that the said amount 
of Rs. 3z,500 was not his professional income as the amount had 
been given to him in trust for charity. 
Held, that the said amount Was the professional income o'. 
the assessee and was liable to income-tax. 
At the time When 
this money ,was paid to the assessee no trust or obligation inJhe 
nature of trust was created. The clients who paid the money 
did not create any trust nor imposed any legally enforceable 
obligation on the assessee. 'fhe money when it was received by 
the assessee was his,professional ipcome though he had eXpressed 
a desire earlier to create~ charitable trust out of 
the~ money 
when received. 
The assessee's own voluntary desire to create a 
trust out of the fees paid to him, did not create a trust or a 
legally enforceable obligation. 
· 
Raja Bejoy Singh Dudhuria v. Commission<r of Income Tax, 
Bengal, [1933] l I.T.R. 135, referred.to. 
CIVIL. APPELLATE 
JURISDICTION: 
Civil . Appeal, 
No. 236 ofl955. 
Appeal from the judgment and order dated August 
3, 1953, of the Punjab High Court in Civil Reference 
No. 7/195~. 
M. C. · Setalvad, Attorney-General for India, K. N. 
Rajagopal·Sastri and D: Gupta, for the appellant. 
· 
N. d. Chatterjee and S. K. Sekhri, for the respond-
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1960. July 27. 
The Judgment of the Court was 
delivered by 
July •7. 
Cnmmts-~ioner nf 
/11c1,:>1e-tax 
v. 
Thakur Das 
Bhargaia 
S. K. Das]. 
76 
SCPREME COURT REPORTS 
[ 1961] 
S. K. DAS J.-fhis 1s an appeal on a certificate of 
fitness granted under the provisions of aub-s. 2 of 
R. 66A of the Indian Income-tax Act, 1922, by the High 
C'ourt of Judicature for the State of Punjab then sit-
ting at Simla. The certificate is dated December 28, 
1953, and wa.s granted on an application '.Dade by thf 
Commissioner of Income-I.ax, Punjab, appellant herein. 
The relevant facts a.re shortly stated below. 
For the assesment yea.r I 946-4 7, one Pandit Thakur. 
da.s Bha.rga.va, a.n advoca.to of HiBBa.·r a.nd respondent 
btiforc us, was assessed to income tax on a total assess-
able income of Rs. 58,475/. in the account year 1945-
46. 
This sum included the amount of Rs. 32,500/-
sta.ted to have been received by the respondent in 
July, 1945 for defending the accused persons in a case 
known as the Farrukhnagar case. The assessee claim-
ed that the said a.mount of Rs. 32,500/· was not a part 
of his professional income, because the amount was 
given to him in trust for charity. This claim of the 
assessee was not accepted by the Income-tax Officer, 
nor by the Appellate Assistant Commissioner who heard 
the appeal from the order of the Income-tax Officer. 
Both these officers held that the assessee had received 
the amount of Rs. 32,500/. as his profession a.I income 
and the trust which the a.ssessee la.ter created by a 
.deed of Trust dated August 6, 1945, did not change 
the nature or character of the receipt as professional 
income of the aBBessee; they further held that the per-
sons who paid the money t-0 the assessce did not create 
any trust nor impose any obligation in the nature of a 
trust binding on the assessec, and in fact and law the 
trust was created by the assessce himself out of his 
professional income; therefore, the amount attracted 
tax as soon as it was received by the aBBessee as his 
professional income, and its future destination or 
application was irrelevant for taxing purposes. From 
the order of the Appellate·Assista.nt Commissioner a 
further appeal was carried to the Income-tax Appel. 
late Tribunal, Delhi Branch. We shall presently state 
the facts which the Tribunal found, but its conclusion 
drawn from the facts found was expreBBed in the 
fo II owing words : " The income in this case did not at 
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1 S.C.R. SUPREME 'COURT REPORTS 
77 
I86o 
any stage arise

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