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1 - 10 of 11 (0.31 seconds)Assam Bengal Cement Co. Ltd vs The Commissioner Of Income-Tax,West ... on 11 November, 1954
There can be no doubt that by paying this sum of Rs.
7,50,000 the managed company has secured for itself a
release from the obligation to pay a higher remuneration to
the assesee firm for the rest of the period of managing
agency covered by the Principal Agreement. Prima facie,
this release from liability to pay a higher remuneration for
over 17 years must be an advantage gained by the managed
company for the benefit of its business and the immunity
thus obtained by the managed company may well be regarded as
the acquisition of an asset of enduring value by means of a
capital outlay which will be a capital expenditure according
to the test laid down by Viscount Cave, L.C., in Atherton v.
British Insulated and Helsby Cables Limited(1) referred to
in the judgment of this Court in Assam Bengal Cement Co.
Ltd. v. Commissioner of Income-tax (2). If the sum of Rs.
7,50,000 represented a capital expenditure incurred by the
managed company, it should, according to learned counsel for
the assessee firm, be a capital receipt in the hands of the
assessee firm, for the intrinsic characteristics of capital
sums and revenue items respectively are essentially the same
for receipts as for expenditure. (See Simon's Income-tax, II
Edn., Vol. 1, para. 44, p. 31). But, as pointed out by the
learned author in that very paragraph, this cannot be an
invariable proposition, for there is always the possibility
of a particular sum changing its quality according as the
circumstances of the payer or the recipient are in question.
Accordingly, the learned Attorney-General appearing for the
respondent contends that we are not concerned in this appeal
with the problem, whether, from the point of view of the
managed company, the sum represented a capital expenditure
or not but that we are called upon to determine whether this
sum represented a capital receipt in the hands of the
assessee firm.
The Commissioner Of Income Tax And ... vs The South India Pictures Ltd., ... on 14 March, 1956
This sum of Rs. 7,50,000 has undoubtedly not been paid as
compensation for the termination or cancellation of an
ordinary business contract which is a part of the stock-in-
trade of the assessee and cannot, therefore, be regarded as
income, as the amounts received by the assessee in The
Commissioner of Income-tax and Excess Profits Tax v. The
South India Pictures Ltd. (1) and in The Commissioner of
Income-tax, Nagpur v. Rai Bahadur Jairam Valji (2) had been
held to be. Nor can this amount be said to have been paid
as compensation for the cancellation or cessation of the
managing agency of the assessee firm, for the managing
agency continued and, therefore, the decision of the
Judicial Committee of the Privy Council in The Commissioner
of Income-tax v. Shaw Wallace and Co.(1) cannot be invoked.
It is, however, urged that for the purpose of rendering the
sum paid as compensation to be regarded as a capital
receipt, it is not necessary that the entire managing agency
should be acquired.
Commissioner Of Income-Tax, Nagpur vs Rai Bahadur Jairam Valji And Others on 7 October, 1958
This sum of Rs. 7,50,000 has undoubtedly not been paid as
compensation for the termination or cancellation of an
ordinary business contract which is a part of the stock-in-
trade of the assessee and cannot, therefore, be regarded as
income, as the amounts received by the assessee in The
Commissioner of Income-tax and Excess Profits Tax v. The
South India Pictures Ltd. (1) and in The Commissioner of
Income-tax, Nagpur v. Rai Bahadur Jairam Valji (2) had been
held to be. Nor can this amount be said to have been paid
as compensation for the cancellation or cessation of the
managing agency of the assessee firm, for the managing
agency continued and, therefore, the decision of the
Judicial Committee of the Privy Council in The Commissioner
of Income-tax v. Shaw Wallace and Co.(1) cannot be invoked.
It is, however, urged that for the purpose of rendering the
sum paid as compensation to be regarded as a capital
receipt, it is not necessary that the entire managing agency
should be acquired.
The Commissioner Of Income Tax vs Shaw, Wallace And Co. on 14 March, 1932
The learned
Attorney-General, however, contends that this case is not
governed by the decisions in Shaw Wallace's case (2) or
Messrs.
The Commissioner Of Income-Tax And ... vs The South Indian Pictures Ltd., ... on 26 September, 1951
As has been said by this Court in Commissioner of Income-tax
and Excess Profits Tax, Madras v. The South India Pictures
Ltd.(1), " it is not always easy to decide whether a
particular payment received by a person is his income or
whether it is to be regarded as his capital receipt".