Supreme Court of India · 1962-12-11
P. H. DIVECHA AND ANOTHER vs COMMISSIONER OF INCOME-TAX,BOMBAY I
- Citation / case number
- SC 1961/254
- Court
- Supreme Court of India
- Petitioner
- P. H. DIVECHA AND ANOTHER
- Respondent
- COMMISSIONER OF INCOME-TAX,BOMBAY I
- Author
- DAS, S.K.,KAPURL.,SARKAR, A.K.,HIDAYATULLAH, M.,DAYAL, RAGHUBAR
- Bench
- DAS, S.K.,KAPUR, J.L.,SARKAR, A.K.,HIDAYATULLAH, M.,DAYAL, RAGHUBAR
Judgment text excerpt
The Supreme Court held that the payments received by the partners of the firm under the transition agreement with Phillips Electric Co. were taxable under Section 10(5A) of the Indian Income Tax Act, 1922. The Court ruled that the payments were not compensation for the termination of a trading agreement but rather constituted a taxable receipt. The High Court's decision to classify the payments as taxable was upheld, affirming that they did not qualify for exemption under Section 4(3)(VII).