COMMISSIONER OF INCOME TAX Vs. M B TYRES

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the I.T. Act, by the Income-tax Appellate Tribunal, Indore, stating the case and referring the same to us for opinion on the following question of law :

(2.) THE assessee is a registered firm carrying on business in the purchase and sale of tyres. THE assessment year in question is 1975-76, for which the relevant previous year was the year ending Diwali 1974. During the previous year the assessee's business premises were acquired for the purpose of construction of an overbridge at Siyaganj, Indore. THE assessee received compensation amounting to Rs. 55,291 from the Government. THE break-up of this amount was as follows : <FRM>JUDGEMENT_295_ITR137_1982Html1.htm</FRM>

(3.) THE assessee filed a second appeal before the Appellate Tribunal. THE Appellate Tribunal held that the sum of Rs. 48,361, which the AAC had added as the business income of the assessee for the previous year, was a capital receipt and, therefore, the same was not liable to be included as business income of the assessee for the previous year. THE addition of Rs. 48,361, which was upheld by the AAC, was directed to be deleted. On an application by the revenue the aforesaid question has been referred for opinion.