Judgment

N. H. BHAGWATI J.: (with him B. P. Sinha J.) This appeal with a certificate from the High Court of Judicature at Hyderabad raises the question whether the sum of Rs. 2,19,343 received by the assessee in the year of account relevant for the assessment year 1951-52 was a revenue receipt or a capital receipt.

2. The facts leading up to this appeal may be shortly stated:

The assessee is a registered firm consisting of five brothers and the wife of a deceased brother having equal shares in the profit and loss of the partnership. The firm was appointed the sole selling agents and sole distributors for the Hyderabad State for the cigarettes manufactured by M/s. Vazir Sultan Tobacco Co., Ltd., under the terms of a resolution of the Board of Directors dated January 6,1931

"Mr. Baker reported that an arrangement had been come to for the time being whereby the firm of Vazir Sultan and Sons, were given the distributorship of "Charminar" Cigarettes within the H. E. H, the Nizam s Dominions and that they were allowed a discount of 2 per cent on the gross selling price."

3. No written agreement was entered into between the Company and the assessee in respect of the above mentioned arrangement