GHULAM HASSAN SHEIKH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Tribunal has made this reference to this court.

(2.) THE following question of law has been referred for the opinion of the court:

(3.) WE have heard the learned counsel for the parties at length. Mr. R.N. Kaul appearing for the assessee has contended that the transaction of the sale of the route permit by the assessee was not in the line of the business of the assessee. It was not in the course of the business that he got the sum of Rs. 20,000. This was in the nature of a windfall or a mere casual payment which he got in consideration of the route permit. It lay heavily on the revenue to show that the amount in question was in the nature of revenue receipt and was taxable under the Income-tax Act. But the revenue has failed to discharge the onus. Therefore, according to him, such a consideration received by the assessee could not be characterised as a revenue receipt and was not chargeable to tax. To put it differently, the argument is that the transaction of the sale of the route permit was not in the course of normal business so as to have enabled the assessee to earn any profit out of such transaction. The transaction of sale of route permit did not constitute an adventure in the nature of business and was not, therefore, in the course of a profit making scheme. It is further submitted that if this view does not find favour with the court, then in the alternative it may be held that such a transaction could not be treated as yielding any revenue receipt but only a capital gain. In support of these arguments, reliance has been placed on Saroj Kumar Mazumdar v. Commissioner of Income-tax [1959] 37 ITR 242 (SC), Janki Ram Bahadur Ram v. Commissioner of Income-tax [1965] 57 ITR 21 (SC) and P.M. Mohammad Meerakhan v. Commissioner of Income-tax [1969] 73 ITR 735 (SC).