1971 (8) TMI 36 - SC - Income Tax

Compensation for termination of service of the managing director - Held that the compensation of the type with which we are concerned in this appeal are capital receipts

Summary

The Supreme Court held that the sum of Rs. 50,000 grossed up to Rs. 1,00,301 was a capital receipt and not a revenue receipt in the hands of the assessee. The assessee, a former managing director of M/s. Airways (India) Ltd., received compensation for termination of services due to nationalization of airways. The Income-tax Appellate Tribunal ruled in favor of the assessee, which was upheld by the High Court. The Supreme Court dismissed the appeal as frivolous, citing previous decisions that similar compensations are capital receipts. Appeal dismissed.