COMMISSIONER OF INCOME TAX Vs. SALKIA TRANSPORT ASSOCIATES

JUDGEMENT

(1.) At the instance of the CIT the two following questions of law have been referred to this court under Section 256(1) of the I.T. Act, 1961 :

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amounts received by the assessee from the persons to whom it sub-let the buses in the previous years relevant to the assessment years 1964-65, 1965-66, 1967-68, 1968-69 and 1969-70 could be construed as premiums for parting with a capital asset and, in that view, holding that the said amounts were capital receipts and not revenue receipts in the assessee's hands?" 2. The facts relevant for the purpose of this case are as follows :

(3.) One group of Khannas, namely, Aminchand Khanna, Indra Kumar Khanna, M.R. Khanna and Vijoy Kumar Khanna, took on hire 23 buses from M/s. Salkia Transport Agency Pvt. Ltd. (hereinafter described as " the company ") under an agreement dated March 29, 1963. The said Khannas formed themselves into a partnership styled as M/s. Salkia Transport Associates with the object of plying the aforesaid 23 buses. Salkia Transport Associates, the assessee herein, replaced five of the worn out buses with five new buses. Clause 10 of the agreement between the parties provided :