TMI Blog2003 (11) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Rs. 8.6lakhs received by the assessee and covered by the termination agreement cannot constitute the income of the assessee? - (ii) Whether, having regard to the existing provisions of section 28(ii)(c), the Tribunal is right in law in deleting the sum of Rs. 8.6 1akhs from the income of the assessee on the ground that the compensation received by the assessee is capital in nature?" question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 8.6 1akhs from the income of the assessee on the ground that the compensation received by the assessee is capital in nature?" The assessee is a company and the assessment year involved is 1986-87.The assessing authority found from the balance-sheet that the assessee has included a sum of Rs. 8.6 lakhs under the head "Reserves and surplus". The said sum was received by the assessee on te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in the business of trading in bundy tubing, various items of imported goods, floor covering and other products, had been distributing on principal to principal basis the products of Tube Investment of India, T. I. Miller Ltd. and T. I. Diamond Chain Ltd. The distributorship was terminated and as a result thereof, the assessee received a compensation of the above-mentioned Rs. 42 lakhs. Simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for having lost the profit-making apparatus; otherwise where there could be a same transfer without totally snapping the link with the profit-earning apparatus, whatever the amount received, whether as consideration or compensation, would never be termed as a capital receipt. One test for ascertaining as to whether what was received was a capital receipt or a revenue receipt is to find out whet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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