MAHARAJA CHINTAMANI SARAN NATH SAH DEO vs THE COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA

The Supreme Court held that the amounts received by the appellant, a Zamindar, for granting licenses to prospect bauxite were capital receipts and not liable to income tax under the Income Tax Act. The Court interpreted the transaction as a grant of a right to a portion of capital rather than merely the use of capital. This decision overturned the Income-tax Appellate Tribunal's ruling that classified the receipts as revenue, thereby affirming the High Court's judgment in favor of the appellant.