TMI Blog1960 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - - - - - Dated:- 8-3-1960 - Judge(s) : HIDAYATULLAH., KAPUR., SARKAR JUDGMENT The judgment of the court was delivered by SARKAR, J.--The question raised is whether a certain sum received by the respondent was a capital receipt or a revenue receipt. The respondent was a firm carrying on a business of purchasing and selling paper, stationery and other things and manufacturing books, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent is that there was injury to its profit making apparatus. By that it is not suggested that the respondent's business had a profit making apparatus apart from its tangible capital assets, of the kind found to have been in existence in Van den Berghs Ltd. v. Clark. What is said is that there was a loss to the goodwill, that is to say, the benefit that the respondent's business derived from its connection with the building where it was carried on. It is said that this benefit was lost as the business had to be shifted from the old premises to a new one as a result of the requisition. This is the contention that we have to examine in this case. It is not disputed on behalf of the Department that such a goodwill would be a capital asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the claim as framed sensible. It would then be a claim for one thing only, namely, for loss of profits. The Department says that that is all that was claimed. It is difficult to hold that the claim so framed was, as the respondent contends, for three things, namely, (a) compulsory vacation of premises, (b) disturbance of business and (c) loss of business. If three things were claimed all could not have been together computed by one measure of two years' loss of profit as was done. The claim for loss of business would have been without any particulars as to how the loss was said to have been occasioned and this could hardly have been intended. It is reasonable to think that the compulsory vacation of the premises was mentioned as explaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of loss of goodwill. This observation was made because the Tribunal found that it had not been proved that the respondent had actually suffered any loss. No question of actual proof of loss arose for making the claim. That is why the Tribunal said that the payment was on account of compulsory vacation of premises ; from such vacation a loss of profit might reasonably be presumed. The Tribunal does not mention any loss of goodwill at all and no question of any such loss appears to have been raised either in the Tribunal or the High Court. We think we ought to refer to another part of the respondent's letter earlier mentioned, to which our attention was drawn. There it is stated : "When we think of our competitors in the open mark ..... X X X X Extracts X X X X X X X X Extracts X X X X
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