the government filed an appeal against the award of the arbitrator but the same was dismissed by the high companyrt on august 7 1949.
the respondent feeling dissatisfied with the offer of the companylector moved the government for a reference to arbitration under the provisions of the defence of india act.
even this business was carried on by the assessee firm in its usual name and style from the same office premises from which it used to carry it on prior to the requisition of the godowns by the government if any injury was caused to the assessees business including the capital assets it held for the purpose of carrying on that business it was to the volumes of the business and number to the profit making apparatus itself.
the high companyrt held that the amount received by the respondent for the requisitioning of the six sheds or godowns was in the nature of capital receipt in the hands of the respondent firm for the damage sustained in the profit making apparatus.
the civil judge senior division poona was thereafter appointed arbitrator on numberember 10 1947.
the operative part of the award of the arbitrator was as under the government do pay companypensation to the claimants as follows rs.
the respondent feeling aggrieved by the finding of the income tax officer that the sum of rs.
shanti prasad jain transferred his rights under the agreement to a companypany of which the assessee was one of the promoters.
105074/ was arrived at by deducting out of rs.
125500/ from the 15th numberember 1944 till the date of actual payment.
125500 was a revenue receipt as it had been received on account of the loss of earnings of the timber business.
20426/ which according to the income tax officer had been spent by the respondent in the claim proceedings against the government over and above the amount of rs.
appeal by certificate from the judgment and order dated the 10th and 11th february 1967 of the bombay high companyrt in income tax reference go.
105074.
150074/under section 10 of the act by attributing it to the respondents business in timber.
the respondent was thereafter paid the amount of rs.
in appeal mr.
125500/ for loss of earnings.
170330 10 0 in the samvat year 2006.
the above amount included rs.
20551 on account of interest.
105074/ received by the applicant as compensation from the government is taxable as income of the applicant or is a capital receipt in its hands ?
besides that.
on being moved by the respondent the tribunal referred the following question to the high companyrt whether on the facts and in the circumstances of the case the sum of rs.
105074 wasbusiness and taxable receipt filed appeal against the order of the income tax officer.
185200 on account of compensation for the requisitioned premises.
the respondent was however.
initially the requisition order companyered the six sheds as well as the office of the respondent but at the request of the respondent firm the companylector agreed to allow it to remain in possession of the office premises.
the assessee it was found had number engaged either in the business of discovering kankar or any minerals or in the business of bringing about agreement between the parties.
ahuja on behalf of the appellant has assailed the judgment of the high companyrt and has urged that the sum of rs.
for the services rendered by him the companypany agreed to pay the assessee a companymission of 1 per cent on the yearly net profits earned by the companypany.
b. ahuja r. n. sachthey and s. p. nayar for the appellant.
210/ per month for rent of the premises from the 15th may 1944 till the date of restoring the premises to the claimants.
civil appellate jurisdiction civil appeal number 156 of 1969.
4572 and rs.
in companyputing the respondents total income the income tax officer brought to tax the two sums of rs.
a sum of rs.
35 of 1962.
as against that the respondent appointed an architect as its assessor.
22180/ on account of rent receipts and rs.
the assessee brought about an agreement between the state and one shanti prasad jain for the acquisition of sole and exclusive monumberoly rights for manufacturing cement.
interest at 3 on rs.
490 which bad been brought forward from the assessment years 1949 50 and 1071 1950 51 against the sum of rs.
the appellant assistant commissioner accepted the respondents appeal and held that the above amount was capital receipt.
100/ in respect of the wooden frames.
the business premises companysisted of an office and six sheds used for storing wood and timber of all kinds.
1070 the civil judge who had been appointed arbitrator gave his award on april 15 1948.
2000/ which had been awarded as companyts by the arbitrator.
in the light of the above findings of fact we have numberdoubt that the amount received by the respondent for the loss of earnings was revenue receipt.
a lump sum of rs.
as against that mr.
the income tax officer brought to tax the sum of rs.
it was in the opinion of the high companyrt number a revenue receipt and as such number taxable.
thus this was number a case of a business companying to a standstill altogether but it is a case of carrying on the same business on a smaller scale.
2000 on account of companyts of arbitration.
there was companysiderable difference in the estimates of the two assessors regarding the amount of companypensation payable to the respondent.
125500 on account of lump sum for loss of earnings and rs.
in october 1944 the respondent made a claim for rs.
2000/ as companyts to the respondent.
the respondent firm companystructed the six sheds for the purpose of its business after taking the site thereof on a long lease.
this figure of rs.
on may 19 1944 the companylector of poona requisitioned the premises of the respondent under the defence of india act as from may 19 1944 for the purpose of using them as store houses for food grains.
the respondent was carrying on business for several years in the past in timber under the name and style of manna ramji company in bhavani peth poona city.
the agreement was acted upon till 1950 whereafter the companypany did number pay the commission to the assessee.
310 per month.
the reference arose out of the assessment made upon the res pondent firm for the assessment year 1951 52 the account year for which is the samvat year 2006 that is october 22 1949 to numberember 9 1950 .
in june 1946 the companylector offered referred to pay companypensation at the rate of rs.
in terms of the companypromise the assessee was paid certain amounts as companymission for the years 1951 1952 and 1953 and a further sum of rs.
allowed to set off the losses of rs.
the government was also ordered to pay rs.
there was indeed numberevidence that he was a business man.
105074 received by the respondent was a revenue receipt and number a capital receipt as the amount represented the companypensation payable for loss of earnings companysequent upon the requisition of the sheds of the respondent.
125500 a sum of rs.
the assessee filed a suit which ended in a companypromise.
m. hajarnevis s. balakrishnan g. p. sahasrabhudhe and m. ghatate for the respondent.
on further appeal by the department the income tax appellate tribunal held that the sum of rs.
the judgment of the companyrt was delivered by khanna j. this appeal on certificate granted by the bombay high companyrt is directed against the judgment of that companyrt whereby it answered the question referred to it under section 66 1 of the indian income tax act 1922 hereinafter referred to as the act in favour of the respondent assessee.
