ADDITIONAL COMMISSIONER OF INCOME TAX Vs. MAHARASHTRA APEX CORPORATION LIMITED

JUDGEMENT

(1.) THESE two references by the Income-tax Appellate Tribunal, Bangalore Bench (hereinafter referred to as "the Tribunal"), are at the instance of the revenue and they relate to the same assessee for two different assessment years and involve the same question.

(2.) THE question referred in I.T.R.C. No. 70 of 1976 reads :

(3.) SINCE the assessee had realised by 1968, the entire amount paid for purchase of these bonds, the ITO treated the annual instalments of Rs. 4,280 and Rs. 4,230 as income receipts and levied the tax on them. The assessee's claim that these two instalments were in the nature of capital receipt and not liable to tax, was rejected by the ITO and the AAC, but found favour with the Tribunal. The reasoning of the Tribunal for treating these annual receipts as capital receipts was that the purchase of these bonds was not in the course of the business of the assessee, that it was also not shown that the assessee had borrowed any money for the purchase of these bonds and that their purchase could not be regarded as an adventure in the nature of trade. The Tribunal sought to derive support from the decision of the Supreme Court in G. Venkataswami Naidu andamp; Co. v. CIT .