| Case ID |
450da01a-2dab-4cac-9929-6f2d7d42faa1 |
| Body |
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| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The court held that the mere establishment of a master-servant relationship is not sufficient for the computation of income under section 7 of the 1922 Act for a person practicing a profession. It was determined that the income of the assessee, a film actress, should be computed under section 10 instead. The actress's employment was temporary and incidental to her profession, as she entered into contracts with various film companies for specific acting roles. She had no intention of permanently engaging with any one company and was free to lend her services elsewhere after fulfilling her commitments. The decision was therefore in favor of the assessee, confirming that her income arose from her profession rather than from a salaried position. |
| Summary |
This case revolves around the taxation of income for professionals, specifically a film actress, Mrs. Durga Khote, under the Income-tax Act. The core issue was whether her income should be classified under section 7 or section 10 of the Act. The court examined the nature of her contracts with film companies, emphasizing that her engagements were temporary and aligned with her professional practice as an actress. This distinction is crucial in tax law, as it affects how income is categorized and taxed. The judgment reinforces the principle that professionals can engage temporarily with clients without forfeiting their professional status. The ruling is significant for understanding the tax implications for those in creative professions, highlighting the importance of maintaining professional independence while fulfilling contractual obligations. This case serves as a precedent for similar future disputes involving income computation for professionals, making it a pivotal reference in tax law discussions. |
| Court |
Bombay High Court
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| Entities Involved |
Not available
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| Judges |
CHAGLA, CJ,
TENDOLKAR, J.
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| Lawyers |
G.N. Joshi for the Applicant,
Palkhiwalla and J. B. Kanga for the Respondent
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| Petitioners |
Commissioner of Income Tax
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| Respondents |
Mrs. Durga Khote
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| Citations |
1952 SLD 250 = (1952) 21 ITR 22
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| Other Citations |
Davies v. Braithwaite [1931] 18 Tax Cas 198
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| Laws Involved |
Income-tax Act, 1961
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| Sections |
28(i),
10(1),
7
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