RAMANUJAM J.

The assessee is a prominent and eminent surgeon running a nursing home at Madras. One G. R. Kanagasabai Pillai of Kariamangalam in Tanjore District underwent treatment in the nursing home of the assessee during the period from November, 1957, to December, 1958, for a chronic ailment. The said Kanagasabai Pillai got completely cured and he had paid to the assessee a sum of Rs. 4, 082 as fees for the professional services rendered by him Kanagasabai Pillai owned about 300 acres of lands, both wet and dry. He had no issues. By a deed dated March 9, 1960, he gifted to the assessee 31.56 acres of manja lands and 1.82 acres of punja lands situate in Kariamangalam village specifically mentioning in the gift deed that the assessee had shown him kindness, infused in him self-confidence and gave him sense of protection which he could never forget, that the assessee's kindness and protection had created a feeling of gratitude in his mind and to translate it into concrete shape, he was making the gift of the lands to the assessee. The gift deed specifically provided that the assessee should not sell the lands gifted to him without obtaining the permission of the donor.

Coming to know of this gift deed, the ITO reopened the assessment of the assessee for the assessment year 1960-61 under s. 147(a) of the I.T. Act, 1961, hereinafter referred to as "the Act". The assessee objected to the value of the lands gifted being treated as taxable income, his contention being that the gift had been made to him by Kanagasabai Pillai not as remuneration for the professional services rendered by him but only in appreciation of his personal qualities. The ITO did not accept the assessee's contention but proceeded to hold that the gift was made by the donor in consideration of the professional services rendered by the assessee as doctor and, therefore, the receipt was definitely not of a casual and non recurring nature. He determined the value of the lands gifted at Rs. 65, 000 which was taken as chargeable to taxAggrieved by such assessment, the assessee preferred an appeal to the AAC contending, (1) that the reopening of the assessment under s. 147(a) is illegal, and (2) that the gift of lands having been made in appreciation of his personal qualities, it is only a casual and non-recurring income not arising out of the profession carried on by him, and, therefore, the same is not chargeable to tax. The AAC rejected the first contention but accepted the second, with the result the sum of Rs. 65, 000 which was taken as income from profession was deleted from assessment.

Aggrieved by the said decision, the Revenue preferred an appeal to the Income-tax Appellate Tribunal. In the appeal the Revenue did not dispute that the receipt by the assessee was only a casual and non-recurring receipt but it mainly contended that it was for the assessee to show that the receipt in question did not arise from the exercise of his profession and that he had not done so. The assessee on the other hand contended before the Tribunal that the gift in question was made for his personal qualities and consequently it could not be said to be connected with the services rendered by the assessee. Thus, the main question before the Tribunal was whether Kanagasabai Pillai had gifted the lands in question to the assessee in appreciation of the latter's personal qualities or as a remuneration for the professional services rendered. The Tribunal took the view that, on the facts and circumstances of the case, it was for the Department to establish that the receipt in question was taxable income and proceeded to hold, after consideration of the recitals in the gift deed and the oral statements made by the donor and the assessee before the ITO and other circumstances such as payment of Rs. 4, 082 by the donor to the assessee as remuneration for the services rendered, that the gift of the lands in question having been made two years after the donor got discharged from th