NICHHATAR SINGH Vs. STATE

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.) THE petitioner Shri Ghulam Hassan assessee filed the Returns for the accounting year 1969 -70 before the Income Tax Officer. The year of assessment is 1970 -71. According to the Returns filed by him he was charged tax at Rs. 8161/ - In the Returns filed the assessee had showed the value of the sale of the route permit at Rs. 20,000/ - This route permit alongwith the truck was sold by him on 20 -5 -1969 to Shri Janki Nath and Sardar Jaswant Singh C/o Messrs Bharat Transport Company, Jammu (Tawi). The truck originally a private carrier was purchased by the assessee for Rs. 40,000/ - in May 1965. He thereafter securing the requisite route permit converted it into Public Carrier and after some time sold it for Rs. 35,000/ - (Rs. 15,000/ -represents the value of the truck and Rs. 20,000/ - the consideration for the route permit). According to the assessee the receipt of the amount of the route permit was not taxable as according to him it did net constitute revenue receipt. It was only in the nature of casual payment which the assessee received by was of windfall. The argument did not, however, find favour with the Income Tax Officer. He treated this amount of Rs. 20,000/ - as revenue receipt and assessed it for the purpose of levy of income tax Against the judgment of the Income Tax Officer the petitioner went up in appeal before the Assistant Commissioner of Appeals. The Assistant Commissioner agreed with the view of the Income Tax Officer that the amount in question was revenue receipt and was taxable. A further appeal was taken before the Income Tax Appellate Tribunal at Amritsar. The Tribunal by its order dated 17 -1 -1974 dismissed the appeal and upheld the judgment of the lower appellate authority. Before the Appellate Tribunal the contention raised by the petitioner was that the consideration of Rs. 20,000/ - was not from any business activity. It was not stock -in -trade. The receipt was of casual and non -recurring nature and, therefore, not taxable. The learned Tribunal did not agree with the view propounded before it. It also discountenanced the proposition that the amount received was in the nature of a capital gain and not income from other sources. The assessee, thereafter, moved the Appellate Tribunal under Section 256(1) of the Income Tax Act for making a reference to the High Court for seeking its opinion on the proposition of law, whether the sum of Rs. 20.000/ - received in consideration of the route permit was revenue income and liable to tax. The Income Tax Appellate Tribunal acceded to the request of the assessee and has referred this question to this court. This is how the matter has come before us.