loom hours would be capital expenditure, because
it is not a universally true proposition that what may be
capital receipt in the hands ... must necessarily
be capital expenditure in relation to the payer. The fact
that a certain payment constitutes income or capital receipt
in the hands
nonbusiness purposes and treating the receipt of sales tax subsidy by the assessee as revenue receipt as against capital receipt treated by the assessee ... case, which has co-relation with the fixed capital investment, should be treated as capital receipt only.
37. We have considered the submissions made
Office Memorandum of June 14, 2002, was,
Revenue Receipt, and not Capital Receipt,
hence liable to Tax, the appellants-assessees have
approached this Court ... view that the
Receipts in the hands of the assesses were
Production Incentives and thus Revenue Receipt
and not Capital Receipt. This, however, appears
issue whether mesne profit constituted revenue receipt or capital receipt was not before the Court as is apparent from the question posed by the Court ... posed by the Assessing Officer was whether such receipts could be treated as Revenue receipts or Capital receipts. The Assessing Officer was of the view
asset of an enduring character, capital in
character, and the compensation paid therefor was a capital
receipt, and (2) that the true character ... asset of an
enduring character, capital in character, and the
compensation paid therefor was a capital receipt.
(2) The true character of the agreement
foundation for source of any income-Whether
payment constituted capital receipt and hence not taxable-
Whether payment was capital receipt or income depends on
nature ... Income Tax
Act and that they could not be regarded as capital receipts
in the hands of the assessee.
Hence the assesee filed appeals
agency was a
revenue receipt (trading receipt or an income receipt) as
contended by the Revenue or a capital receipt as contended
by the assessee ... capital
receipt and was therefore not liable to tax.
The question whether a particular receipt is a revenue
receipt or a capital receipt
under
the agreements, which constituted a capital asset of the
company, and that it was a capital receipt. lord Macmillan
observed.
"Now what were ... works at the quarry
of a capital nature and could not be held to be a capital
receipt on that account, the agreements were merely
capital assets of the assessee, compensation paid for the
sterilization of even part of a capital asset must be
regarded as a capital receipt. Furthermore ... trade there A are two types of capital, one circulating
capital and the other fixed capital. Fixed capital is what
the owner turns to profit
under an agreement not to
compete (negative covenant agreement) is a capital receipt
or a revenue receipt is the question which arises for
determination ... lakhs
received by the assessee from Ranbaxy was a capital receipt
not taxable under the Income Tax Act, 1961 (hereinafter for
short
