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TMI Blog1980 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... shed by the Russian buyer with the bank for foreign trade of the U.S.S.R. for the total value of the contracts. 95% of the price was to be paid on shipment and the balance of 5% after the goods reach the destination. The goods covered by the two contracts were duly shipped on May 21, 1966. The buyer had opened the letter of credit and the assessee realised 95% of the price on May 27, 1966. In realising this amount the assessee had to face some difficulty, as the Russian and had advised the letter of credit to be opened in the name of " Hanuman Trading Company " whereas the assessee's name is " Sree Hanuman trading Company The assessee, however, managed to negotiate documents by giving a guarantee to the Indian Overseas Bank, Alleppey, where the letter of credit had been opened. On May 27, 1966, the assessee wrote to the Russian buyer to get this mistake corrected. On June 7, 1966, the Russian bank sent a letter to the Indian Overseas Bank, Alleppey, asking that the name " Hanuman Trading Company " be corrected as " Sree Hanuman Trading Company ". The Indian Overseas Bank, Alleppey, received this letter on June 9, 1966. However, in the meanwhile on June 6,1966, the Indian rupee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent a letter dated October 18, 1967, to the assessee informing it that the matter had been taken up with the Russian buyer. On November 21, 1967, the Embassy informed the assessee that it had received a letter from the Russian buyer that it had made the payment to the assessee. That letter is in these terms : " We have received your letter No. 10/Com/8/66 dated the 18th October, 1967, and wish to inform you that we instructed the bank to remit the amount of Rs. 1,87,870.45 to Messrs. Sree Hanuman Trading Company which is due to it per devaluation for delivery of black pepper-100 tons according to contracts 218 and 227." It is in this way that the assessee got Rs. 1,87,870.45, being 47.5% of 95% of the sale price. The ITO, Alleppey who was the assessing officer, brought this amount to tax rejecting the assessee's claim that being a casual receipt which did not arise from its business it was exempt from tax liability. On appeal by the assessee the AAC, Trivandrum, confirmed the assessment agreeing with the ITO. On further appeal, the Income-tax Appellate Tribunal settled the following 4 questions for consideration : (1) Whether the receipt of Rs. 1,87,870 is income, (2) Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d when the Indian rupee was devalued on June 6, 1966, and the press note was issued on July 27, 1966. It was in that situation that the assessee put forward its demand for 47.5% of 95% by its letter dated November 5, 1966, expressly basing it on the shipments and claiming it as the balance amount due under the shipments. Despite certain earlier resistance the Russian buyer ultimately yielded and accepting the assessee's stand made the payment. The intervention of the Indian Embassy at Moscow at the instance of the assesse might have facilitated settlement of the difference between the assessee and the Russian buyer, but there is nothing on the record to conclude that the Russian buyer made the payment, de hors the contracts and as matter of gift, under pressure from the Indian Embassy. The result is, the amount was claimed, paid and accepted as the enhanced value of the balance sale price under the contracts, consequent upon the devaluation.In our view, the receipt was income obtained by the assessee in the course of the business and was not a windfall. We might add that as the amount was received in the course of business it would be still taxable even if it was a voluntary paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the novel. The company arranged for a part in the film to be enlarged so as to be suitable for the taxpayer. The taxpayer played the leading part in the film under an agreement which also provided for sale to the company of the film rights for pounds 4,000. This was pounds 2,300 in excess of the amount he had paid to the novelist for acquiring the rights. The General Commissioners of Income-tax held that the pounds 4,000 formed part ofthe profits and gains arising to the taxpayer in his profession as an actor and so was assessable to tax. On appeal a learned judge of the Chancery Division reversed the assessment, holding that the sale price did not form part of the taxpayer's remuneration or profits in respect of his profession as an actor but was the realisation of an investment nor was the sale transaction in the nature of trade, since the taxpayer acquired the right as an investment and had no other transaction of a similar nature. This case has no application nor does it provide an assistance. We might refer to two cases, M. Shamsuddin Co. v. CIT [1973] 90 ITR 323 (Ker) and Bank of Cochin Ltd. v. CIT [1974] 94 ITR 93 (Ker), decisions of this court, both of which were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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