COMMISSIONER OF INCOME-TAX, MYSORE vs THE CANARA BANK LTD.

The Supreme Court held that the appreciation in the value of money remitted from Pakistan to India after the devaluation of the Indian Rupee in 1949 constituted a capital receipt rather than a revenue receipt. The Court found that the money had changed its character from stock-in-trade to a blocked and sterilized amount, which was not utilized for internal banking operations. Consequently, the High Court's decision to treat the appreciation as a capital receipt was upheld, and the appeal by the Commissioner of Income-tax was dismissed.