Judgement

Appeal (No. 108 of 1931) from a judgment of the High Court (January 1.3, 1931) upon a reference by the Commissioner of Income-tax under s. 66, sub-s.2, of the Indian Income-tax Act, 1922.

The matter for consideration in the appeal was, in substance, whether the respondents, who carried on business as merchants and agents in Calcutta and elsewhere in India, were chargeable to income-tax under the above Act in respect of compensation paid to them for the termination of agencies for two oil-producing companies,

The facts of the case and the three questions referred appear from the judgment of the Judicial Committee.

The High Court, by a judgment delivered by Rankin C.J. and concurred in by C. C. Ghose and Buckland JJ., answered the first question in the affirmative, thereby holding that the sum of Rs.9, 83,361 (being the compensation received less admitted deductions) was a capital receipt and therefore did not come within the computation of the profits of the respondents business. Having regard to that conclusion no answer was returned to the second and third questions. The Court was however of opinion, upon the authority of In re Turner Morrison & Co. (( 1928) I. L. R. 56