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1960 (3) TMI 2 - SC - Income TaxWhether a certain sum received by the respondent was a capital receipt or a revenue receipt? Whether this sum of ₹ 57,435 was liable to income-tax and excess profits tax? Held that:- The sum of ₹ 57,435 had not been received by the respondent for any injury to any of its capital assets. In our view, the sum was received as compensation for loss of profits for the period during which, it was imagined, the respondent's business would remain stopped before it could be re-started at a new premises. That being so, it was clearly a revenue receipt ; it has not been disputed that if the amount in question was paid as compensation for loss of profit, it would be a revenue receipt and liable to tax. As it was a trading receipt, it cannot be held exempt from tax under section 4(3)(vii) of the Income-tax Act either. In the result we answer both the questions framed in this case in the negative.Appeal allowed.
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