COMMSSIONER OF INCOME TAX, WEST BENGAL. vs KAMAL BEHARI LAL SINGHA ETC.

The Supreme Court held that the nature of a receipt, whether capital or revenue, is determined by its character in the hands of the receiver, not the payer, as established under the Indian Income-tax Act, 1922. The Court found that the distribution of amounts attributable to land acquisition compensation and selamis by the Ukhara Estate Zamindaries Ltd. to the shareholders constituted capital receipts in the hands of the assessees, despite being labeled as dividends. The High Court's decision favoring the assessees was upheld, confirming that such receipts are not taxable as income under Section 2(A) of the Act.