COMMNR. OF INCOME TAX, GUJARAT vs M/S.SAURASHTRA CEMENT & CHEM.INDUS.LTD.

The Supreme Court addressed the appeal concerning the taxation of Rs. 8,50,000/- received by the assessee as liquidated damages under the Income Tax Act, 1961. The Court held that such receipts are capital in nature and not taxable as revenue under Section 2(24) of the Act, affirming the High Court's decision that the Tribunal correctly classified the amount as a capital receipt. The Court also noted that the addition to machinery for the purpose of Section 80J was already settled in favor of the assessee by a prior ruling.