- (1.) THE Tribunal, Jaipur Bench, Jaipur, has referred the following question of law arising out of its order, dt. 27th June, 1980, in respect of the asst. year 1977 78 under S. 256(1) of the IT Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that brokerage amounts to profession and not business ?"
(2.) THE brief facts of the case are that the assessee derived income from brokerage and claimed it to be professional income in accordance with Sub paragraph II of Paragraph C of the Finance Act, 1977. The ITO found that income derived is from business and not from profession as no special skill was acquired and, therefore, it cannot be considered to be income from profession. In appeal before the CIT (A) also it was considered that profession involves the idea of an occupation requiring purely intellectual skill or manual skill on the basis of some special learning and accordingly the appeal of the assessee was dismissed. The Tribunal in the second appeal found that profession involves the idea of an occupation requiring either purely intellectual skill or any manual skill and, therefore, brokerage was considered to be a "profession" and not a "business". The Tribunal took into consideration the fact that brokerage was derived by personal exertion without any monetary investment and on that basis the income was considered to be as that from profession. This Court in CIT vs. Bhagwan Broker Agency (1995) 126 CTR (Raj) 175 : (1995( 212 ITR 133 (Raj) D. B. IT Ref. No. 125 of 1981, decided on 11th May, 1993 has held as under (at page 142) : "From the above judgment of the Supreme Court, the activities carried on under the agency agreement were held to be business. In the case of a broker, the activities are carried on either under a written agreement or even a verbal agreement in respect of different constituents and the activities, therefore, would amount to business. The Tribunal has proceeded only on the basis that some manual/professional skill is required for earning income from brokerage which could not be the only criteria. There should be some special qualification of a person apart from skill and ability, which is required in carrying on any activity which could be considered as profession. This could be by having education in a particular system either in a college or university or it may be even by experience. No such finding has been given by the Tribunal with regard to personal qualification and, therefore, we are of the view that the Tribunal was not justified in coming to the conclusion that the income from brokerage should be assessed as professional income and not brokerage income."
(3.) IN view of the decision of this Court referred to above, the present reference is also answered in favour of the Department and against the assessee. There is no order as to costs.;