9911796707
TMI Blog1978 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in holding that the surplus of Rs. 1,00,998 realised by the applicant consequent on the devaluation of the Indian rupee on June 6, 1966, was not on capital account as claimed by the applicant but a revenue receipt taxable in the assessment year 1967-68 ? " The question of law referred in I.T.R.C. No. 129 of 1975 reads: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the surplus of Rs. 34,082 realised by the applicant consequent on the devaluation of the Indian rupee on June 6, 1966, was not on capital account as claimed by the applicant but a revenue receipt taxable in the assessment year 1969-70 ? " For the purpose of these references, the material facts are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's business, and hence the amounts so transferred should be regarded as capital, and that any accretion thereto due to devaluation of the Indian rupee, should be treated as capital gain and not as income and hence no tax could be levied on such profits realised by the assessee due to devaluation. In support of his contention Sri Kumar strongly relied on the decision of the Madras High Court in Addl. CIT v. Chettinad Corporation (P.) Ltd. [1978] 112 ITR 898. There, the profits realised by the assessee from its business in Sri Lanka could not be repatriated to India prior to June 6, 1966, due to the restriction placed by the Government of Sri Lanka for transfer of funds from that country to India. After the removal of such restrictions, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,123 was in the nature of revenue receipt under the agency, it became a capital asset of the assessee since that amount was retained in America with the sanction of the Reserve Bank of India to buy capital goods and that such purchase of capital goods was an independent transaction and that any accretion to such amount was a capital gain. We do not see how the above decision can be of any assistance to the assessee in the present cases. Merely because the assessee chose to retain in Sri Lanka the profits earned therein and to transfer them to India subsequently, such profits did not get transformed into capital. That such profits had already been subjected to tax in India before they were so transferred to India, is also an irrelevant cir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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