9911796707
TMI Blog1983 (9) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 70 assessment year was not a revenue receipt includible in the total income of the company ? The facts are these. The three assessment years under reference are 1967-68, 1968-69 and 1969-70 of which the relevant previous years are the years ending September 30, 1966, September 30, 1967, and September 30, 1968, respectively. The assessee had 136 unissued equity shares of the face value of Rs. 500 each. By a resolution No. 25/64 dated January 30, 1965, the board of directors of the assessee resolved that the unissued equity shares of the company of Rs. 500 each be thereafter issued at a premium of Rs. 1,000 per share. In pursuance of this resolution of the Board, out of 136 unissued equity shares, 34 shares were allotted during the accountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst year, Rs. 83,000 in the second year and Rs. 12,000 in the third year as the assessee's income under the head " Income from other sources". The assessee came up in appeal before the AAC. The AAC deleted the additions on the ground that the amounts in question could not be treated as revenue receipt. Being dissatisfied with the decision of the AAC, the ITO came in appeal before the Tribunal. In appeal before the Tribunal, it was contended on behalf of the Revenue that the amounts clearly represented revenue receipt in the hands of the assessee. The Tribunal for reasons recorded upheld the decision of the AAC and dismissed the departmental appeal. Mr. Wazir Singh, the learned counsel for the Revenue, took us through the records of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance is placed on a number of authorities, namely, CIT v. Ukhara Estate Zamindaries (Pvt.) Ltd. [1971] 82 ITR 103 (Cal), Member for the Board of Agricultural Income-tax v. Sindhurani Chaudhurani [1957] 32 ITR 169 (SC), Durga Das Khanna v. CIT [1969] 72 ITR 796 (SC), Maharaja Chintamani Saran Nath Sah Deo v. CIT [1971] 82 ITR 464 (SC), Karanpura Development Co. Ltd. v. CIT[1962]44 ITR 362 (SC) and Jyotirindra Narayan Sinha Chowdhury, In re [1945] 13 ITR 263 (Cal). Three of the cases, namely, CIT v. Ukhara Estate Zamindaries Pvt. Ltd. [1971] 82 ITR 103 (Cal), Member for the Board of Agricultural Income-tax v. Sindhurani Chaudhurani [1957] 32 ITR 169 (SC) and Karanpura Development Co. Ltd.'s case [1962] 44 ITR 362 (SC), cited by the counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources. The premium or salami which is paid once for all and is not a recurring payment, hardly satisfies this test. In that case, it was found on facts that the payment of a lump sum which was of non-recurring nature showed that the amount in question had all the characteristics of a capital payment and not revenue. Again in Maharaja Chintamani Saran Nath Sah Deo's case [1971] 82 ITR 464, the Supreme Court held that salami is a single payment made for the acquisition of the right of the lessor by the lessee to enjoy the benefits granted to him by the lease. The onus is, however, upon the income-tax authorities to show that there exist facts and circumstances which would make payment of what has been called salami, income. In the case be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and, therefore, it could never be considered as revenue. Section 78 of the said Act statutorily provides for the application of premium received on issue of shares and it has to be transferred to an account to be called the share premium account. The learned counsel for the Revenue at the Bar tried to make out new case for the Revenue that the amount of premium received by the assessee was a revenue receipt of the assessee's business. We are not inclined to deal with those arguments as the amounts had not been treated even by the ITO as revenue receipts of the company's business. The ITO said that it is a revenue receipt assessable under the head " Income from other sources " in the hands of the assessee-company. Such " income from other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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