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E.I.D. Parry Ltd. vs Commissioner Of Income Tax on 29 October, 1996 cites

Commissioner Of Income-Tax vs Barium Chemicals Ltd. on 18 February, 1987

In CIT vs. Barium Chemicals Ltd. cited supra, the Andhra Pradesh High Court held that in order to decide whether or not a payment is a revenue receipt, its true nature and substance must be looked into. If the payment is received in the ordinary course of the business of the assessee for loss of stock-in-trade, it is a revenue receipt. If, on the other hand, the payment received is towards compensation for extinction, or sterilisation, partly or fully of a profit earning source, such receipt, not being in the ordinary course of the assessee's business, is a capital receipt. Thus, considering the final settlement arrived at between the assessee and the Japanese company, dt. 25th July, 1968, and cls. 28, 32, 34, 34(i), 34(vi) and 40, in the agreement, dt. 14th July, 1965 and 28th Feb., 1967, we are of the opinion that a portion of Rs. 9.5 lakhs paid by the Japanese company should be treated as capital in nature and such portion is determined by us as 1/3rd of Rs. 9.5 lakhs which related to delay in procurement of capital assets. In so far as 2/3rd of Rs. 9.5 lakhs is concerned, we are not disturbing the order passed by the Tribunal holding that such quantum of compensation is revenue in nature, since the said sum relates to erection and construction of the works and the performance of all other duties.
Andhra HC (Pre-Telangana) Cites 23 - Cited by 28 - K Ramaswamy - Full Document

Commissioner Of Income-Tax, Andhra ... vs Sirpur Paper Mills Ltd. on 19 January, 1978

8. Reliance was placed upon the decision of the Supreme Court in CIT vs. Sirpur Paper Mills Ltd. (supra). According to the facts arising in that case, the building, plant and machinery belonging to the respondent, were covered by the insurance against loss by fire. They were partly damaged by fire and the respondent received a sum of Rs. 9,41,070 as compensation in respect of the loss. The respondent spent only a sum of Rs. 1,57,813 and restored the building, plant and machinery to working condition. The question was, whether the balance of Rs. 7,03,207 was assessable to tax either as a revenue receipt nor under s. 41(2) of the IT Act. While answering this question, the Supreme Court held that since the plant and machinery was only partly damaged by fire and after repairing the damage, the plant and machinery was recommissioned there was no scope for the applicability of s. 41(2). In the absence of specific provision in the Act, the amount received by the respondent in respect of damage to the plant and machinery could not be brought to tax and the Revenue could not seek to tax the amount by resorting to the analogy of s. 41(2). This decision was cited by the learned counsel appearing for the assessee in order to support his contention that the compensation received in the present case should also be considered as capital nature. However, the learned standing counsel appearing for the Department pointed out that in cited supra, the compensation was paid for the loss of a part of building, plant and machinery. Therefore, the compensation would be in the nature of capital. But to the present case the above said decision would render no assistance to the assessee, since compensation was not paid for loss of capital goods.
Supreme Court of India Cites 5 - Cited by 69 - P N Bhagwati - Full Document

Associated Oil Mills Ltd., Madras vs Commissioner Of Income-Tax, Madras on 8 March, 1960

5. On the other hand, the learned standing counsel appearing for the Department, submitted that in as much as compensation was received not for any injury to the profit making apparatus, it cannot be considered as capital in nature. It was submitted that Rs. 9.5 lakhs was paid by the Japanese company to the assessee since the assessee was prepared to receive this amount as a reduction from Rs. 16 lakhs, which was claimed on the basis of loss of profit due to the defects committed by the Japanese company in delivering the plant. According to the learned standing counsel even though in the agreement under cl. 32 that for the breach of the contract, the Japanese company would pay 3 per cent out of the total contract rate, it would represent only damages for loss of profit. According to the learned standing counsel, the decision of the Andhra Pradesh High Court in cited supra would not be applicable to the facts of this case, since there was total abandonment of the project by the foreign company according to the facts arising in that case. For these reasons, it was submitted that the Tribunal was correct in holding that Rs. 9.5 lakhs received by the assessee should be considered as revenue receipt.
Madras High Court Cites 13 - Cited by 7 - Full Document

Shree Digvijay Cement Co. Ltd. vs Commissioner Of Income-Tax, Gujarat-V on 3 August, 1981

In order to support his contention, the learned standing counsel appearing for the Department, relied upon the decision reported in Shree Digvijay Cement Co. Ltd. vs. CIT (1982) 138 ITR 45 (Guj), wherein the Gujarat High Court held that the actual cost or price of the machinery and compensation payable to the assessee-company were two different and distinct things. Compensation was paid to set off or reduce the loss which the assessee suffered as a result of delay in supply of machinery. It had nothing to do with the cost of machinery. Though adjusted against the cost of machinery, it was none the less compensation. The actual cost of machinery could not be reduced by Rs. 5,72,216 and depreciation and development rebate had to be allowed on the entire cost of machinery as per the agreement.
Gujarat High Court Cites 18 - Cited by 43 - M P Thakkar - Full Document

Commissioner Of Income-Tax Poona vs M/S. Manna Ramji & Co on 29 August, 1972

11. The learned standing counsel also relied upon the decision of the Supreme Court reported in CIT vs. Manna Ramji & Co. , wherein it was held that it is for the Tribunal to find facts and it is for the High Court and Supreme Court to lay down the law applicable to the facts found. Neither the High Court nor the Supreme Court has jurisdiction to go behind or to question the statement of facts made by the Tribunal. The statement of case is binding on the parties and they are not entitled to go behind the facts of the Tribunal in the statement. When the question referred to the High Court speaks of "on the facts and circumstances of the case, it means on the facts and circumstances found by the Tribunal and not on the facts and circumstances as may be found by the High Court. In the present case, decision was rendered on the facts recorded by the Tribunal, considering the several clauses in the agreement, dt. 25th July, 1968 and the subsequent understanding between the parties recorded in the note of Mr. C. P. Featheratons.
Supreme Court of India Cites 8 - Cited by 51 - H R Khanna - Full Document

Commissioner Of Income-Tax (Central) vs Rohtas Industries Ltd. on 30 January, 1978

13. The attention of this Court was also drawn to the decision of the Calcutta High Court in CIT vs. Rohtas Industries Ltd. . In the abovesaid decision, a question arose whether on the facts and circumstances of the case, the Tribunal was right in holding that a sum of Rs. 2,44,922 was a payment for low out-put and as such a revenue receipt, and not a rebate on the actual price of the machinery originally supplied by M/s Escher Wyss, affecting the written down value of the machinery for income-tax purposes? While answering this question, the Calcutta High Court held that payment for low out-put, as such is a revenue receipt and not a rebate on the actual price of machinery originally supplied by the German firm to the assessee. In the present case, on the facts, it was held that a part of the compensation paid related to sterilisation of profit making apparatus, which was paid as a contract price. Payment for low out-put as such was not separately taken into consideration in the instant case. In view of the foregoing reasons, we answer the question referred to us in the negative in so far as that part of question which related to payment made for sterilisation of the profit making apparatus, viz., 1/3rd of Rs. 9.5 lakhs. Accordingly, we answer this part of the question in the negative and in favour of the assessee. In respect of the rest of the portion of the amount paid by the Japanese company, we are answering that portion of the question in the affirmative and against the assessee. No costs.
Calcutta High Court Cites 13 - Cited by 31 - Full Document
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