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Issues:
1. Whether the sum received in consideration of waiving rights under a lease is a casual gain or non-recurring income under the Income-tax Act. 2. Whether the sum received is a salami and if it is assessable income or a capital receipt. 3. Whether income derived in a previous year can be treated as assessable income in a subsequent year. Analysis: Issue 1: The judgment primarily addresses the nature of the sum received by the assessees in consideration of waiving their rights under a lease. The Income-tax authorities contended that this sum should be treated as assessable income. The Court analyzed the circumstances and determined that the sum, being a salami or premium, was not to be considered as income under Section 12 of the Income-tax Act. The Court emphasized that the logic excluding depreciation of wasting assets also applied to this sum, as it was part of a re-settlement of the property for a long period. Therefore, the Court concluded that this sum should not be treated as income. Issue 2: The second issue pertained to whether the sum received was a salami and if it constituted assessable income or a capital receipt. The Court examined the nature of the payment and the purpose behind it. It was established that the sum was indeed a salami or premium paid for the re-settlement of the property for a significant duration. The Court reasoned that treating any part of this sum as income would be unreasonable, given the exclusion of depreciation for wasting assets. Consequently, the Court ruled in favor of the assessees on this issue, determining that the sum should not be considered as income. Issue 3: Regarding the third issue, the Court did not delve into detailed analysis as the resolution of the second issue rendered the other questions moot. The Court's decision on the nature of the sum received negated the need to address whether income derived in a previous year could be treated as assessable income in a subsequent year. Therefore, the Court did not provide a detailed analysis or ruling on this particular issue. In conclusion, the judgment focused on the characterization of the sum received by the assessees in connection with the lease rights waiver. By determining that the sum was a salami and should not be considered as income, the Court resolved the key issues raised by the Income-tax authorities. The assessees were granted costs for the Reference, and the other questions referred did not require further discussion in light of the Court's decision on the second issue.
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