- (1.) These appeals, by special leave, raise the familiar but difficult question, whether a " receipt " is a capital or a revenue receipt. The appellant in C.A. No. 157/1965, Meenakshi Achi, owns 5/6ths share in Sungei Chour Estate in Malaya.
(2.) V.R.K.R.S. Firm, the appellant in C.A. No. 158/1965, owns rubber estates in Kaualakangsar, Malaya. During the Second World War, rubber estates in the Federated Malay States were either destroyed or denuded. In order to encourage planting or re-planting of rubber trees, the government of the Federated Malay States issued an Ordinance styled. The Rubber Industry (Re-planting) Fund Ordinance, 1952, whereunder a Board was constituted to administer the funds accumulated in terms of the said Ordinance. In the accounting year relevant to the assessment year 1955-56, Meenakshi Achi received $5,962 as re-plantation cess from the said board. So too, the firm received $10,336 in the accounting year corresponding to the assessment year 1955-56. During the assessment proceedings before the Income-tax Officer, the appellants claimed the said amounts as capital receipts. The Income-tax Officer treated them as revenue receipts on the ground that the said payments were made to cover the re-planting expenses of the assessees. On appeals, the Appellate Assistant Commissioner held that the said amounts were business receipts for the reason that the assessees had a reasonable expectation of receiving the amounts and the said amounts had been paid by the government in consideration of running the rubber estate business. On further appeals, the tribunal held that the payments had come to the assessees as a result of their carrying on their business in agriculture in foreign ports and therefore they 'were revenue receipts. At the instance of Meenakshi Achi, the following question was referred to the High court : " Whether, on the facts and in the circumstances of the case, the re-plantation cess receipt of 5,962 dollars is income assessable to tax "
(3.) At the instance of the firm, the following question was referred to the High court: " Whether on the facts and in the circumstances of the case, the sum of 10,336 dollars constitutes income assessable to tax ";