HOSHIARPUR ELECTRIC SUPPLY CO. vs COMMISSIONER OF INCOME TAX, SIMLA

The Supreme Court held that the receipts from consumers for laying service lines by an electricity supply undertaking are capital receipts, not trading receipts, under the Indian Income-tax Act, 1922, specifically Section 66(1). The Court found that the excess of receipts over the costs incurred for installation does not constitute taxable income, as these receipts are for creating capital of lasting value. The High Court's ruling that these receipts were trading receipts was overturned, establishing that such receipts are not incidental to the business operations of the assessee.