JUDGMENT

MANCHANDA J. - This is a case stated u/s 66 (1) of the Indian Income Tax Act, 1922, hereinafter referred to as the Act. The question referred is :

"Whether on a true interpretation of section 4 of the Income Tax Act, the sum of Rs. 20,000 received by the assessee as remuneration was revenue income liable to tax under the Indian Income Tax Act ?"

The material facts lie within a narrow compass. There was a dispute, between Messrs. United Timber Trading Co., Calcutta, and the Union of India, which was referred to the arbitration of two persons. The nominee of the Government was Sri. Charan Singh, Special Solicitor to the Government Department of Industries and Supply, while the arbitrator nominated by Messrs. United Timber Trading Co. Ltd. was the late Sri Sarat Chandra Bose, a leading advocate and at that time a member of the Executive Council Government of India. The aforesaid arbitrators, at a meeting held on the 1st April, 1947, decided to request the assessee to act as an umpire in the event of there being a difference of opinion between them. The offer was conveyed in a letter dated the 3/5th of April, 1947, and was signed by Sri. Shiv Charan Singh for self and on behalf o