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TMI Blog1965 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not invest those assets for the purpose of assessment to tax with any book value which was liable to be taken into account. Compensation received in replacement of those assets by the assessee from the war damage commission must therefore be treated in its entirety as profit liable to tax. Appeal dismissed. - - - - - Dated:- 17-12-1965 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SHAH J.--The Income-tax Appellate Tribunal referred under section 66(1) of the Indian Income-tax Act, 1922, the following questions for the opinion of the High Court of judicature at Madras : " (1) Whether the war damage receipts of $13,889 and $85,479 constitute income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the assessment years 1942-43 and 1941-42 and the assessee obtained the benefit of Rs. 65,197 and Rs. 1,29,028 in the two years in reduction of tax liability. The Government of Malaya set up a war damage commission to compensate persons whose properties had sustained damage due to war conditions, and under the scheme devised by the Government of Malaya the assessee received compensation amounting to $14,169 and $5,479 in the previous years relevant to the assessment years 1954-55 and 1956-57. The Income-tax Officer, Tiruchirappalli, in proceedings for assessment years 1954-55 and 1956-57 brought to tax the amounts received by the assessee as war damages from the Government of Malaya. The order of the Income-tax Officer was confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value less the compensation received from the Central Government, only the excess over that book value received from the Government of Malaya was taxable. In our view this contention is not open to the assessee. Before the Income-tax Officer it was urged that the compensation received from the Government of Malaya was a capital receipt of a casual and non-recurring nature, and on that account not liable to be brought to tax. The Income-tax Officer rejected the contention and held that the receipt was revenue in that it represented recovery of a revenue loss. In appeals to the Appellate Assistant Commissioner and to the Appellate Tribunal the same contention was raised and negatived. The only contention raised before the revenue authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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