Commnr. Of Income Tax, Gujarat vs M/S.Saurashtra Cement & ...

The Supreme Court held that the amount of Rs.8,50,000/- received by the assessee as liquidated damages was a capital receipt and not taxable as a revenue receipt under the Income Tax Act, 1961. The Court affirmed the High Court's decision, which had relied on the precedent set in C.I.T., Gujarat Vs. M/s Elecon Engineering Co. Ltd., thereby concluding that such receipts do not fall under taxable revenue. The Court also noted that the Revenue conceded the correctness of the High Court's ruling regarding the capital employed for the purpose of claim under Section 80J of the Income Tax Act, 1961.