1961 (3) TMI 7 - SC - Income Tax

Whether the sums of ₹ 2,12,080 and ₹ 2,31,563 paid by the Government to the assessee in 1945 and 1946 respectively (exclusive of the sums paid specifically for building repairs) were revenue receipts in the hands of the assessee comprising any element of income ?

Whether the whole of the said sums less the expenses incurred by the assessee in tending the tea bushes constituted agricultural income in his hands exempt from tax under the Indian Income-tax Act, 1922 ?

Held that:- Though the payment in question was not made to fill a hole in the capital of the assessee, as in the Glenboig case, nor was it made to fill a hole in the profits of a going business as in the Shamsher Printing Press case, it cannot be treated as partaking the character of profits because business not having been done, no question of profits taxable under section 10 arose. The Privy Council described such a payment as a solatium. It is not necessary to give it a name ; it is sufficient to say that it was not profit of a business.

Once it is held that this was not profit at all, it is clear that rules 23 and 24 of the Indian Income-tax Rules could not apply, and there was no question of apportioning the amount, as laid down in rule 24. The whole of the amount received by the assessee was not assessable. Appeal allowed.