1964 (5) TMI 5 - SUPREME COURT

Whether the amounts received by the appellant as compensation for loss of agency are of the nature of capital or revenue?

Held that:- On a careful consideration of all the circumstances we agree with the High Court that cancellation of the contract of agency did not affect the profit-making structure of the appellant, nor did it involve a loss of an enduring trading asset: it merely deprived the appellant of a trading avenue, leaving it free to devote its energies after the cancellation to carry on the rest of the business, and to replace the contract lost by a similar contract. The compensation paid, therefore, did not represent the price paid for loss of a capital asset. Appeal dismissed.