KETTLEWELL BULLEN AND CO. vs COMMISSIONER OF INCOME-TAX, CALCUTTA

The Supreme Court held that the sum of Rs. 3,50,000 received by the appellant for relinquishing the managing agency of the Fort William Jute Company was a capital receipt and not a revenue receipt assessable under the Income-tax Act, 1922. The Court emphasized that the transaction involved the parting of an asset of enduring value, thus establishing that compensation for loss of capital does not constitute taxable income. The High Court's affirmative answer to the question posed was reversed, affirming the Appellate Tribunal's decision.