| Case ID |
42babe55-8ec1-4e84-a992-001429e05ef8 |
| Body |
View case body. Login to View |
| Case Number |
D-2741 of 2016 |
| Decision Date |
Dec 11, 1989 |
| Hearing Date |
|
| Decision |
The Kerala High Court held that the amount received by the assessee as interest was a revenue receipt assessable in the hands of the assessee for the assessment year 1975-76. The court found that the entire amount, including the interest, was received due to a settlement between the parties, and it was not possible to spread out the interest over earlier years without evidence of the assessee maintaining accounts on a mercantile basis. The Tribunal's decision was thus affirmed. |
| Summary |
In the landmark case of Rockwell Engg. Co. Ltd. v. Commissioner of Income Tax, the Kerala High Court addressed the critical issues surrounding capital versus revenue receipts under the Income-tax Act, 1961. The case revolved around a dispute between the assessee-company and the State Electricity Board regarding compensation for the construction of transmission towers. The core issue was whether the interest amount received as part of a settlement was taxable as a revenue receipt for the assessment year 1975-76. The court emphasized that the entire amount, including the interest, was received as part of the settlement and thus constituted a revenue receipt. This case is significant for tax professionals and businesses dealing with similar disputes, as it clarifies the treatment of interest in such settlements under tax law. Keywords like 'income tax', 'revenue receipt', and 'settlement agreement' are trending in tax law discussions, making this case essential for understanding taxation principles. |
| Court |
Kerala High Court
|
| Entities Involved |
State Electricity Board,
Rockwell Engg. Co. Ltd.
|
| Judges |
K.S. Paripoornan,
K. A. Nayar
|
| Lawyers |
P. Balachandran,
P.K.R. Menon,
N.R.K. Nair
|
| Petitioners |
Rockwell Engg. Co. Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1989 SLD 2704,
(1989) 180 ITR 277
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
4,
5
|