The Peerless Gen.Fin And Investment ... vs Commnr. Of Income Tax

The Supreme Court addressed whether subscription receipts in the hands of the assessee-Company for assessment years 1985-86 and 1986-87 should be classified as income or capital receipts. The Court held that the amounts treated as income by the assessee were indeed capital receipts, referencing the precedent set in Peerless General Finance and Investment Co. Ltd. vs. Reserve Bank of India (1992) 2 SCC 343. The Court affirmed the Income Tax Appellate Tribunal's decision to allow the appeal, emphasizing that the true legal position cannot be altered by the accounting treatment adopted by the assessee.