MANNA RAMJI AND CO Vs. COMMISSIONER OF INCOME TAX POONA

JUDGEMENT

(1.) THE question referred for our decision is as follows : "whether, on the facts and circumstances of the case, the sum of Rs. 1,05,074 received by the applicant as compensation from the Government is taxable as income of the applicant or is a capital receipt in its hands ?"

(2.) THE question arises with reference to the assessment year 1951-52, the account year being the Samvat year 2006, i. e. , from October 22, 1949, to November 9, 1950. The facts, upon which the reference came to be made, are briefly as follows : the assessee is an unregistered firm by the name of Manna Ramji and Co. In the year 1944 they were doing business at Poona as timber merchants. For the purpose of their business they had six sheds in which they used to stock their timber and an office premises. It appears that the proprietor had a residential house in Poona. On May 19, 1944, during the last war, the Collector of Poona requisitioned the above premises for the purpose of godowns for storage of food grains. Originally, the entire premises of the assessee were requistioned but upon request from the firm, the Collector agreed to allow the office premises to remain in their possession as before.

(3.) CONSEQUENT upon the requisition, the assessee put in a claim for compensation under section 19 of the Defence and of India Act, claiming Rs. 1,85,200 some time in October, 1944. The Collector on his part, however, offered them only rent at the rate or Rs. 310 per month some time in June, 1946.