9911796707
TMI Blog1976 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ? " A few facts giving rise to the question may be stated : The assessees are the executors of the estate of late Shri Frank Summersgill who died in Bombay on 20th March, 1955, leaving his last will made on 23rd February, 1955. The two assessees--Shri Reginald Mathalone and Shri K.B. Parekh--were appointed by the deceased as his executors for the administration of his estate after his death. The question under reference refers to the assessment year 1958-59. It may be stated that up to the end of the previous year relevant to the assessment year in question the administration of the estate was not completed. By virtue of an agreement made between the company, M/s. Williamsons (India) Ltd. on the one hand and himself on the other, the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a period of one year thereafter. Shri Summersgill died on 20th March, 1956, and it appears that a sum of Rs. 41,471 representing the commission of one year's sales after his death was given to the executors as per the aforesaid agreement. It appears that litigation ensued between the legal heirs of Shri Summersgill, namely, his wife and daughter and the executors named under the will in this court on the original side in which the legal heirs claimed for a declaration that the aforesaid amount paid by the company to the executors belonged to them. The originating summons which had been taken in this behalf was decided by this Court on 10th February, 1959, and on a true construction of clause 4 of the agreement this court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, on behalf of the assessees it was contended that the ratio of the decision of this court as well as the Supreme Court in Amarchand N. Shroff's case [1963] 48 ITR 59 (SC) was clearly applicable to the facts of this case and that, therefore, the amount received by the assessees was essentially a capital receipt. The Tribunal upheld the order passed by the Appellate Assistant Commissioner on the ground that in its view also the receipt of Rs. 41,471 by the estate was essentially a capital receipt. The Tribunal took the view that the amount was receivable by the estate by virtue of agreement between the deceased and his employers, that the consideration for the receipt of this amount was services rendered by the deceased and what the esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned therein on the price of all goods sold by the company in the territories specified in that clause and we have also set out above the purport of clause 4 of the agreement under which it had been provided that excepting in certain cases, upon termination of the agreement, the deceased or his heirs, executors or administrators were entitled to the commission at the rate specified in clause 2 of the agreement on all business booked for a period of one year after such termination and admittedly this amount of Rs. 41,471 represented commission of one year's sales after the death of Shri Summersgill which was given by the company as per the aforesaid provisions contained in the agreement. It cannot, therefore, be disputed that the aforesaid am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the principal value of the estate passing on the death of the deceased under the Estate Duty Act. Having regard to these aspects which appear clear on record and having regard to the relevant clauses which are to be found in the agreement dated 29th October, 1948, it seems to us clear that the receipt of this amount in the hands of the assessees will have to be regarded as receipt of a capital nature and not an income of revenue nature. On the facts which are obtaining in this case, therefore, we are of the view that the Tribunal was right in coming to the conclusion that the aforesaid amount received by the executors was not assessable in their hands as their income for the relevant assessment year. Having regard to the above discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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