The appellant thereafter applied to this Court for special leave under Art.
2,50,000 and the two agreements relating to the purchase of limestone and the loading of iron ore at Monoharpore were also executed.
4,000 every month.
In 1936 the Company went into liquidation, and its assets and liabilities were taken over by another Company called the Indian Iron and Steel Company, Ltd. under a scheme of amalgamation dated September 8, 1936.
This Company companytinued to purchase limestone and dolomite from the respondent for some time, but later on, finding that the rates were uneconomic owing to increase in the railway freight, it decided to purchase its requirements from other sources, and by numberice dated May 29, 1939, informed the respondent accordingly.
It is in this situation that the parties came together, and on August 2,1941, entered into a new agreement and it is with this that we are directly companycerned in this appeal.
Appeal by special leave from the judgment and order dated April 21, 1950, of the former Nagpur High Court in Misc.
4,000 , remaining unpaid under the companytract dated May 9, 1940 2 that the Company should take all the limestone required for its furnaces at Kulti from the respondent for a period of 12 years on terms and companyditions set out in an agreement 3 that the respondent was to be appointed the loading companytractors of the Company for loading all iron ore at Monoharpore for a period of 12 years from January 1, 1942, on the terms and companyditions specified in a separate agreement.
4,000 provided in the agreement of May 9, 1940, was also duly paid.
136, and the same was granted, and hence this appeal.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J. This is an appeal against the judgment of the High Court of Nagpur in a reference under s. 66 1 of the Indian Income tax Act XI of 1922 , hereinafter referred to as the Act, and the point that is raised for our determination is whether a sum of Rs.
The agreement recites that the Company feeling difficulty in working their mines referred to in the companytract dated May 9, 1940, made a proposal for termination of the said companytract on certain terms, and that was agreed to.
Thereupon, the respondent filed Suit No.
211 of 1940 in the High Court of Calcutta for specific performance of the companytract dated January 5, 1935, as modified on December 21, 1935, and for an injunction restraining the Indian Iron and Steel Company, Ltd. from purchasing limestone or dolomite from any person other than the plaintiff, and on March 13, 1940, an injunction in those terms was actually issued against the Company.
Ganapathy Iyer and R. H. Dhebar, for the appellant.
135 of 1949.
2,50,000 was a capital receipt in the hands of the respondent, and that it, was number liable to be taxed.
the latter at rates specified therein, and these rates were subsequently modified by another agreement between the parties dated December 21, 1935.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
To companytinue the narration, the railway authorities did number agree to the companystruction at Gangapur of a siding and a loopline to the quarry, and so it became impossible to carry out the agreement in the manner companytemplated by the parties.
109 of 1954.
Pursuant to this agreement, the respondent was paid a sum of Rs.
Civil Case No.
The reference was heard by Sen and Deo, JJ.,
While, according to the Department, the amount in question is a revenue receipt liable to be included in the chargeable income, according to the respondent it is capital receipt number liable to tax.
October 7.
The balance due on account of monthly payment of Rs.
Thereafter, the respondent was to be paid at the rate of Rs.
2,50,000 received by the respondent on August 2, 1941, is chargeable to income tax.
2 9 0 per ton of limestone which might be loaded in the railway wagons to be arranged for by the Company.
Radhavinod Pal, J. M. Thakar and I. N. Shroff, for the respondents.
2,50,000 received by the assessee as damages or companypensation for the premature termination of the companytract of 9th May 1940 is income assessable within the meaning of the Indian Income tax Act.
The Appellate Tribunal held, affirming the decisions of the Income tax Officer and the Appellate Assistant Commissioner, that the amount in question was a trading receipt, and was income liable to be assessed.
The appellant then filed an application under s. 66 A 2 of the Act for a certificate to appeal to this Court, but that was dismissed, the learned judges holding that the law on the subject was well settled.
Thereafter, the Company and the respondent entered into an agreement in settlement of all the disputes between them, and the same was embodied in a document dated May 9, 1940.
