| Case ID |
171265d9-6805-4edc-ba93-eff143e80d5d |
| Body |
View case body. Login to View |
| Case Number |
D-2741 of 1939 |
| Decision Date |
Jan 01, 1939 |
| Hearing Date |
Jan 01, 1939 |
| Decision |
The court held that the sum of Rs. 1,800 received by the assessee as salami for the settlement of certain lands is to be treated as a capital receipt and not as income. The lease was intended to be permanent, and the consideration received was not taxable under the Income-tax Act. The court emphasized the distinction between a single payment made at the time of the settlement and recurring payments made during the period of enjoyment by the lessee. The judges concluded that the premium paid for the settlement of land is not income, reinforcing that capital receipts are not subject to income tax. |
| Summary |
In the landmark case of Commissioner of Income Tax v. Visweshwar Singh, the Patna High Court addressed the taxation implications of a salami payment received by the assessee for the settlement of lands. The decision focused on the interpretation of the Income-tax Act, 1961, particularly Section 4, which defines chargeable income. The court established that the salami payment of Rs. 1,800 was a capital receipt due to the nature of the lease, which was deemed permanent. Key factors influencing the decision included the lease terms, which allowed the lessee to build facilities for rice milling and restricted the sale of rights without consent. The court's ruling highlighted the importance of distinguishing between capital and income receipts, affirming that non-recurring payments made for permanent leases do not constitute taxable income. This case is significant for tax law practitioners and landowners, as it clarifies the treatment of salami payments in income tax assessments, establishing a precedent that could influence future tax disputes. |
| Court |
Patna High Court
|
| Entities Involved |
Not available
|
| Judges |
Fazl Ali,
Manohar Lall
|
| Lawyers |
S.M. Gupta,
Sir Sultan Ahmad,
Murari Prasad,
S.P. Srivastava,
G.M. Missir,
Prem Lal
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Visweshwar Singh
|
| Citations |
1939 SLD 18,
(1939) 7 ITR 536
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
4
|