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Commissioner Of Income Tax vs Presidency Co-Operative Housing ... on 22 February, 1993 cites

The Commissioner Of Income Tax vs Shaw, Wallace And Co. on 14 March, 1932

In the above case the Supreme Court cited with approval the definition of 'income' given by the Privy Council in the case of CIT vs. Shaw Wallace & Co. (59 Indian Appeals 206) to the effect that income in the Indian IT Act connotes a periodical monetary return, coming in with some sort of regularity or expected regularity from definite sources. The premium or salami which was paid once for all and is not a recurring payment, hardly satisfied this test. The Supreme Court, therefore, held such a premium to be a capital receipt. But it does not follow that a payment which is not received with any periodic regularity necessarily ceases to be income. The definition of income given in the above case of Shaw Wallace & Co. has been considerably whittled down in later decisions, although it continues to serve as a pointer to some of the factors which may be considered in deciding whether a receipt is to be considered as revenue or not. We will come to this a little later.
Bombay High Court Cites 8 - Cited by 167 - Full Document

National Cement Mines Industries, Ltd vs Commissioner,Of Income-Tax, West ... on 17 January, 1961

In the case of National Cement Mines Industries vs. CIT , the assessee-company was carrying on the business of manufacturing cement and lime, sale of limestone and of acquiring the rights and concessions of one K. Co. The assessee-company conveyed to another company its rights and concessions pertaining to limestone and bauxite deposits for a present consideration and further payments. There was a covenant for certain minimum annual payments. The purchaser company undertook to pay all rents, royalties, etc., due under the rights and concessions. In the accounting year in question, the assessee-company received Rs. 77,820 under the covenant providing for the payment of 12 annas per ton of cement manufactured by the purchaser company. The question was whether that amount was taxable income. The Supreme Court held that the transaction was substantially a commercial transaction for sharing the profits of the commercial activities of the purchaser company and, hence, the amount was of the nature of income and not capital. In deciding the question the Supreme Court has observed, "In assessing the true character of a receipt for the purpose of the IT Act, inability to ascribe to the transaction which is the source of the receipt, a definite category is of little consequence. It is not the nature of the receipt under the general law but in commerce that is material. It is often difficult to distinguish whether an agreement is for payment of a debt by instalments or for making annual payments in the nature of income. The Court has, on an appraisal of all the facts, to assess whether a transaction is commercial in character yielding income or is one in consideration of parting with property for repayment of capital in instalments".
Supreme Court of India Cites 4 - Cited by 35 - J C Shah - Full Document

Durga Das Khanna vs Commissioner Of Income-Tax, Calcutta on 30 January, 1969

In the case of Durga Das Khanna vs. CIT , the lessees paid to the lessor a sum of Rs. 55,200 towards the cost of erecting a cinema house. The rent agreed to be paid was Rs. 2,100 per month. The lease deed did not contain any condition or stipulation from which it could be inferred that the sum of Rs. 55,200 had been paid by way of advance rent. The Supreme Court said that the sum of Rs. 55,200 which was paid to the appellant was in the nature of a premium or salami. It had all the characteristics of a capital nature and was not revenue. It said that a payment of this character was in the same class as the payment of a premium on the grant of a lease. It observed that the distinction between a single payment made at the time of the settlement of the demised property and recurring payments made during the period of the settlement of the demised property and recurring payments made during the period of its enjoyment by the lessee and recurring payments made during the period of its enjoyment by the lessee was well recognised in law. It, therefore, held the premium to be a capital receipt. This ratio has no application to the present cases because the society has not received any premium for parting with any rights in its capital assets.
Supreme Court of India Cites 4 - Cited by 44 - A N Grover - Full Document

Shree Nirmal Commercial Ltd. vs Commissioner Of Income-Tax on 10 April, 1991

12. We may, however, refer to the case of Shree Nirmal Commercial Ltd. vs. CIT (1992) 193 ITR 694 (Bom). In the above case the company had obtained a lease of a piece of land belonging to the Government of Maharashtra with an intention of constructing a building which could be used as commercial premises. In order to raise finances for the construction, the company devised a scheme. Under the scheme, the shareholders of the company were to enter into a standard form of agreement which would confer on the shareholders the right of occupation of specified floor space in the building. As against this, the shareholders were required to pay what was styled as compensation at such rates as the directors might, from time to time, determine. In the asst. yr. 1970-71 the assessee received non-refundable deposits totalling Rs. 5,99,861 which were held by the Tribunal to be in the nature of business receipts and considered as income. The Court said that having regard to the manner in which the non-refundable deposits were taken from the shareholders and having regard to the fact that the shareholders were entitled to assign the floor space to others on payment of compensation and to transfer their occupancy rights by selling shares, the whole transaction was, in reality, a sale of floor space by the assessee-company to its shareholders. After parting with the right of occupancy of the floor area to every member, what remained with the assessee was merely ownership in the technical sense of the word. The Court held that the deposits had to be treated as trading receipts. In the present case, the assessee society while granting a lease to each of its members has inserted a clause in the lease whereby it has retained a right to share in the excess amount which the members may receive while transferring his rights. This also, to out mind, appears to be in the nature of an income receipt rather than a capital receipt.
Bombay High Court Cites 9 - Cited by 52 - Full Document
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