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Issues Involved:
1. Whether the sum of Rs. 9 lakhs was a capital receipt or a revenue receipt. 2. Whether the Tribunal was justified in holding that no direction could be given to bring the capital gains to tax in these proceedings. Issue-Wise Detailed Analysis: Issue 1: Capital Receipt vs. Revenue Receipt The primary question was whether the Rs. 9 lakhs received by the assessee from the transfer of mining lease ML 130 was a capital receipt or a revenue receipt. The Tribunal had held it to be a capital receipt, but the Revenue contested this finding. The court examined the principles laid down by the Supreme Court regarding the distinction between capital and revenue receipts. It referred to the definitions and explanations provided in landmark cases like *Kettlewell Bullen and Co. Ltd. v. CIT* and *Gillanders Arbuthnot and Company Limited v. CIT*. The court noted that the terms "capital receipt" and "revenue receipt" are not defined in the Income-tax Act and are not capable of precise definition. The principles established by the Supreme Court indicate that what is received for the loss of capital is a capital receipt, while what is received as profit in a trading transaction is taxable income. The court found that the Tribunal's conclusion that the receipt was a capital receipt was based on incorrect assumptions and was contrary to the evidence. The Tribunal had erred in holding that the receipt was a premium for the transfer of the lease. The court noted that the assessee had not impaired its trading structure by transferring one of its six mining leases and continued its mining business with the remaining leases. Therefore, the receipt of Rs. 9 lakhs was not a capital receipt but a business receipt. The court concluded that the Tribunal's finding was based on surmises and conjectures, and the receipt was indeed a revenue receipt. Hence, the court answered Question No. 1 in the negative, in favor of the Revenue and against the assessee. Issue 2: Direction to Tax Capital Gains The second question was whether the Tribunal was justified in holding that no direction could be given to bring the capital gains to tax in these proceedings. Given the court's finding on the first issue that the receipt was a revenue receipt, this question technically did not survive for consideration. However, assuming the question did survive, the court referred to the Division Bench ruling in *CIT v. Maryam Mirza*, which concluded that such a course was not permissible in an appeal filed by the assessee. Therefore, even if the question survived, the court would answer it in the affirmative, against the Revenue and in favor of the assessee. Conclusion: The court provided the following answers to the questions referred: 1. Question No. 1: In the negative, in favor of the Revenue and against the assessee. 2. Question No. 2: Does not survive. But, if it survives, then in the affirmative, against the Revenue and in favor of the assessee. The court directed the parties to bear their own costs due to the divided success and failure.
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