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Issues:
1. Whether the sum received by the assessee from Jupiter Pictures Ltd. is a revenue receipt assessable under the Indian Income-tax Act? Analysis: The case involved the assessment of a sum of Rs. 26,000 received by the assessee, a private limited company engaged in the distribution of films, as compensation for the termination of three contracts with Jupiter Pictures Ltd. The Appellate Tribunal considered this amount as a capital receipt and not assessable to income tax. The revenue authorities argued that the amount represented the income of the assessee's business and should be taxed. The court referred to a previous decision by the Judicial Committee in a similar case involving Shaw Wallace and Co., where compensation received for the termination of agency contracts was held not taxable as it was a solatium for cessation of the contracts, not business income. The court emphasized that the nature of the receipt, whether capital or casual, was irrelevant as long as it did not constitute income, profit, or gain taxable under the Income-tax Act. The court rejected the argument that the receipt was a casual receipt, emphasizing that the crucial factor was whether the receipt was income, profit, or gain falling under the heads of income mentioned in the Income-tax Act. The court clarified that if a receipt did not fall under any of these heads, it was not taxable, regardless of whether it was considered a casual or capital receipt. The court upheld the view of the Appellate Tribunal, ruling against the Income-tax Commissioner and concluding that the amount received by the assessee was not a revenue receipt assessable under the Income-tax Act.
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