9911796707
TMI Blog2023 (9) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... On scrutiny of the impugned order of the tribunal we do not find that any inquiry or finding has been made by the tribunal in relation to the above essential facts. The above judgment of the Supreme Court was sought to be distinguished on facts. It has been stated by the tribunal that in the facts of the Supreme Court case there was an option to the appellant to buy the hotel, a capital asset which the appellant was deprived of. Here there was no such option. The said premises on which the tribunal has proceeded is unfortunately flawed. The main question to be answered was whether on a construction of the agreements, their execution, the conduct of the parties and so on the operation of the two hotels in Iraq by the appellant on a long ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the Iraqi authorities for premature termination of the agreements, further to the United Nations' recommendation in the matter. 4. The Indian tax authorities treated this as a revenue receipt and wanted to tax it. According to the appellant, it was capital a receipt not liable to be taxed. 5. Mr. J. P. Khaitan, learned senior advocate, appearing for the appellant submits that the agreement to operate each of the hotels on a long term basis, although on profit sharing terms and conditions, was to be taken as resulting in capital creation and not an ordinary trading transaction. On termination of the agreements by mutual consent, the compensation received tantamounted to receiving compensation for loss of capital. This was to be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an option to the appellant to buy the hotel, a capital asset which the appellant was deprived of. Here there was no such option. 11. The said premises on which the tribunal has proceeded is unfortunately flawed. 12. The main question to be answered was whether on a construction of the agreements, their execution, the conduct of the parties and so on the operation of the two hotels in Iraq by the appellant on a long term basis could be taken as creation of capital or a source of income? Whether on termination of these agreements, the compensation received by the appellant for not being able to carry out the agreements could be taken as one for loss of capital? 13. In those circumstances, we set aside that part of the impugned order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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