Kettlewell Bullen & Co. Ltd. v. CIT

53 ITR 261Supreme Court of India1964#2006 most cited

What is Kettlewell Bullen & Co. Ltd. v. CIT authority for?

A receipt for loss of capital is a capital receipt, while a receipt as profit from a trading transaction constitutes taxable income. This case provides a foundational test for distinguishing between capital and revenue receipts.

57

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2009 to 2025.

Also referred to as

Kettlewell Bullen & Co. Ltd. · 53 ITR 261 · capital receipt · taxable income · loss of capital · trading profit · capital vs revenue distinction · Section 45 · Section 2(47) · transfer of capital asset · classification of receipts

Sections most often in play

Section 2(47)Section 45Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148
Read the full judgment

Issues it is cited on

section 28(va)relinquishment of rightsection 55(2)section 45(1)section 55section 80htransfer of capital assetsection 80hhblock of assetssection 80hhcsection 2(47)enduring benefit

Judgments citing Kettlewell Bullen & Co. Ltd. v. CIT

ACIT, Chennai vs. Trimex Sands Pvt Ltd., Chennai

In the result, both the appeals of the assessee for assessment years 2011-12 & 2012-13 are partly allowed and both the appeals filed by the Revenue for assessment years

ITA 418/CHNY/2017[2011-12]Status: DisposedITAT Chennai26 Jul 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.S.Purushotham, CAFor Respondent: Shri N. Madhavan, JCIT
Section 11Section 14A

…he receipt as capital in nature, claimed deduction of the amount. It may be pertinent to note that the said decision was affirmed by the Apex court in [2010] 233 CTR 0209/[2010] 325 ITR 0422. The assessee company also drew support from the decisions in [1964] 53 ITR 261(SC) and the Bombay High Court decision in Mahindra & Mahindra Ltd. [1973] 91 ITR 130 (Bom.). 15 - - ITA 383, 384, 418 419/Mds/2017 9.1 It would appear from a reading of the assessment order that the AO proposed to tax ₹ 1,99,35,914/- under the mistaken impression that the assessee offered lesser amount. The confusion in reconciliation could…

Trimex Sands Private Limited, Chennai vs. ACIT, Chennai

In the result, both the appeals of the assessee for assessment years 2011-12 & 2012-13 are partly allowed and both the appeals filed by the Revenue for assessment years

ITA 384/CHNY/2017[2012-13]Status: DisposedITAT Chennai26 Jul 2017AY 2012-13

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.S.Purushotham, CAFor Respondent: Shri N. Madhavan, JCIT
Section 11Section 14A

…he receipt as capital in nature, claimed deduction of the amount. It may be pertinent to note that the said decision was affirmed by the Apex court in [2010] 233 CTR 0209/[2010] 325 ITR 0422. The assessee company also drew support from the decisions in [1964] 53 ITR 261(SC) and the Bombay High Court decision in Mahindra & Mahindra Ltd. [1973] 91 ITR 130 (Bom.). 15 - - ITA 383, 384, 418 419/Mds/2017 9.1 It would appear from a reading of the assessment order that the AO proposed to tax ₹ 1,99,35,914/- under the mistaken impression that the assessee offered lesser amount. The confusion in reconciliation could…

Trimex Sands Private Limited, Chennai vs. JCIT, Chennai

In the result, both the appeals of the assessee for assessment years 2011-12 & 2012-13 are partly allowed and both the appeals filed by the Revenue for assessment years

ITA 383/CHNY/2017[2011-12]Status: DisposedITAT Chennai26 Jul 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.S.Purushotham, CAFor Respondent: Shri N. Madhavan, JCIT
Section 11Section 14A

…he receipt as capital in nature, claimed deduction of the amount. It may be pertinent to note that the said decision was affirmed by the Apex court in [2010] 233 CTR 0209/[2010] 325 ITR 0422. The assessee company also drew support from the decisions in [1964] 53 ITR 261(SC) and the Bombay High Court decision in Mahindra & Mahindra Ltd. [1973] 91 ITR 130 (Bom.). 15 - - ITA 383, 384, 418 419/Mds/2017 9.1 It would appear from a reading of the assessment order that the AO proposed to tax ₹ 1,99,35,914/- under the mistaken impression that the assessee offered lesser amount. The confusion in reconciliation could…

ITO, WD-7(3), Kolkata vs. M/S Energy Development Compnay Ltd., Kolkata

In the result, the appeal filed by the Revenue is dismissed

ITA 797/KOL/2014[2010-2011]Status: DisposedITAT Kolkata03 Mar 2017AY 2010-2011

Bench: Shri N.V.Vasudevan Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.797/Kol/2014 ("नधा"रण वष" / Assessment Year :2010-2011) Ito Ward-7(3), Kolkata, Vs. M/S Energy Development P-7, Chowringhee Square, Company Limited, R.No.17, 5Th Floor, Kolkata- Edcl House, 1A, Elgin 700 069 Road, Kolkata-700020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabce 6969 K .. (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से /Revenue By : None "नधा"रती क" ओर से /Assessee By : Ms.Vandana Bhandari सुनवाई क" तार"ख / Date Of Hearing : 07/02/2017 घोषणा क" तार"ख/Date Of Pronouncement 03/03/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: ` The Captioned Appeal Filed By The Revenue, Pertaining To The Assessment Year 2010-2011, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)-Viii, Kolkata, In Appeal No.145/Cit(A)-Viii/Kol/13-14, Dated 27.02.2014, Which In Turn Arises Out Of An Order Passed By The Ao U/S.143(3) Of The Income Tax Act 1961, (Hereinafter Referred To As The ‘Act’), Dated 28.03.2013. 2. Brief Facts Of The Case Qua The Assessee Are That The Assessee Filed Its Return Of Income Declaring Nil Income On Dated 14.10.2010, For A.Y.2010-11. The Case Of The Assessee Was Selected For Scrutiny Through Cass & The Ao Framed Assessment U/S.143(3) Treating The Forfeited Amount Of Rs.12,40,00,000/- As Revenue Income In Respect Of 75000 Warrants. The Assesse Under Consideration Had Forfeited 75000 Warrant Amounting To Rs. 12,40,00,000/- Allotted To Promoters & Other Investors

For Appellant: Ms.Vandana BhandariFor Respondent: None
Section 115JSection 143(3)Section 145(3)Section 28

…being capital receipts, the fact that in the installation of capital, only a certain amount was immediately expended, the balance remaining in hand, could not be regarded as profit in the nature of a trading receipt." (ii).Kettlewell Bullen & Co. Ltd. [1964] 53 ITR 261 (SC) "Whether a particular receipt is capital or income from business, has frequently engaged the attention of the courts. It may be broadly stated that what is received for loss of capital is a capital receipt: what is received as profit in a trading transaction is taxable income. " The above view is fortified by the decision of the Karnataka Hig…

Amita R. Sheth, Mumbai vs. DCIT Cen Cir 46, Mumbai

ITA 1166/MUM/2013[2009-10]Status: DisposedITAT Mumbai15 Feb 2017AY 2009-10
For Appellant: S/Shri M.M. Golvala & Mr. Hormuzd JamshedjiFor Respondent: Dr.Kailash P. Gaikwad
Section 143(3)Section 254(1)Section 51

…trading profit or no trading profit, are questions which, though they may depend no doubt to a very great extent on the particular facts of each case, do involve a conclusion of law to be drawn from those facts'." 12. In Kettlewell Bullen and Co. Ltd. [1964] 53 ITR 261; AIR 1965 SC 65 dealing with the question whether compensation received by an agent for premature determination of the contract of agency is a capital or a revenue receipt, echoing the views expressed in Rai Bahadur Jairam Valji [1959] 35 ITR 148 (SC) and analysing numerous judgments on the point, this court laid down the following broad principle…

Allcatel Usa Sourcing Lp ( Included in Alcatel-Lucent Usa Inc.), Mumbai vs. Addl DIT (It) RG 1, Mumbai

In the result, all the appeals filed by the assessees are allowed for statistical purpose

ITA 8601/MUM/2010[2006-07]Status: DisposedITAT Mumbai05 Aug 2016AY 2006-07

Bench: Shri B.R. Baskaran & Shri C.N. Prasadआयकर अपील सं /I.Ta No.8601 & 7533/Mum/2010 ("नधा"रण वष" / Assessment Year:2006-07 & 2007-08 M/S. Alcatel Usa Sourcing The Addl. Director Of बनाम/ Lp (Included In Alcatel- Income-Tax (International Vs. Lucent Usa Inc.) Taxation)-1, C/O Pricewaterhouse Scindia House, Coopers, Mumbai Pwc House, 4Th Floor, Guru Nanak Road, Bandra(W), Mumbai-400 050 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aalfa9998A आयकर अपील सं /I.Ta No.7534 & 7535/Mum/2011 ("नधा"रण वष" / Assessment Year:2007-08 & 2008-09 M/S. Alcatel Usa Sourcing The Addl. Director Of बनाम/ Inc (Included In Alcatel- Income-Tax (International Vs. Lucent Usa Inc.) Taxation)-1, C/O Pricewaterhouse Scindia House, Coopers, Mumbai Pwc House, 4Th Floor, Guru Nanak Road, Bandra(W), Mumbai-400 050 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aagca4535R .. (अपीलाथ" /Appellant) (""यथ" / Respondent) Shri P.J. Pardiwalla अपीलाथ" ओर से/ Appellant By: Shri Madhur Agarwal Shri K.K. Ved ""यथ" क" ओर से/Respondent By: Shri Jasbir Chauhan

For Appellant: Shri Madhur AgarwalFor Respondent: Shri Jasbir Chauhan
Section 143(3)Section 144C(13)Section 234B

…atel USA Sourcing LP received for its termination would be a revenue receipt, irrespective of whether its performance was to consist of a single act or a series of acts spread over a period. (Emphasis supplied by us) • Kettlewell Bullen and Co. Ltd. v. CIT (53 ITR 261) (SC): The Supreme Court has held that where payment is made to compensate a person for cancellation of a contract, which does not affect the trading structure of his business or does not deprive him of what in substance is his source of income, termination of contract being a normal incident to the business, and such cancellation leaves him free…

DCIT 3(2), Mumbai vs. Lml Ltd, Mumbai

In the result, appeal of the revenue stands dismissed

ITA 3666/MUM/2011[2006-07]Status: DisposedITAT Mumbai21 Jun 2016AY 2006-07

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…sion, he relied upon following decisions: 18 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 S. Case Law Citation No 1 CIT v South India Flour Mills P Ltd. [1970] 75 ITR 147 (Mad) 2 Kettlewell Bullen & Co. Ltd. v CIT [1964] 53 ITR 261 (SC) 3 Gillanders Arbuthnot & Co. (P) Ltd v CIT [1964] 53 ITR 283 (SC) 4 CIT v Sheshasayee Bros (P) Ltd. [1999] 239 ITR 471 (Mad 5 CIT v Prabhu Dayal [1971] 82 ITR 804(SC) 6 CIT v Baaji Chitra Mandir [1985] 154 ITR 777 (AP) 7 Break, Inspector of taxes v Robson [1942] 25 Tax case 33(HL) 8 CIT v Best & Co. (P) Ltd. [1966] 60 ITR 11 (SC) 9 Genboig Un…

The ACIT RG-3(2) vs. M/S. Lml Ltd

In the result, appeal of the revenue stands dismissed

ITA 3668/MUM/2004[2000-2001]Status: DisposedITAT Mumbai21 Jun 2016AY 2000-2001

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…sion, he relied upon following decisions: 18 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 S. Case Law Citation No 1 CIT v South India Flour Mills P Ltd. [1970] 75 ITR 147 (Mad) 2 Kettlewell Bullen & Co. Ltd. v CIT [1964] 53 ITR 261 (SC) 3 Gillanders Arbuthnot & Co. (P) Ltd v CIT [1964] 53 ITR 283 (SC) 4 CIT v Sheshasayee Bros (P) Ltd. [1999] 239 ITR 471 (Mad 5 CIT v Prabhu Dayal [1971] 82 ITR 804(SC) 6 CIT v Baaji Chitra Mandir [1985] 154 ITR 777 (AP) 7 Break, Inspector of taxes v Robson [1942] 25 Tax case 33(HL) 8 CIT v Best & Co. (P) Ltd. [1966] 60 ITR 11 (SC) 9 Genboig Un…

M/S. Lml Ltd., Mumbai vs. The Addl CIT RG.3(2)

In the result, appeal of the revenue stands dismissed

ITA 3540/MUM/2004[2000-2001]Status: DisposedITAT Mumbai21 Jun 2016AY 2000-2001

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…sion, he relied upon following decisions: 18 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 S. Case Law Citation No 1 CIT v South India Flour Mills P Ltd. [1970] 75 ITR 147 (Mad) 2 Kettlewell Bullen & Co. Ltd. v CIT [1964] 53 ITR 261 (SC) 3 Gillanders Arbuthnot & Co. (P) Ltd v CIT [1964] 53 ITR 283 (SC) 4 CIT v Sheshasayee Bros (P) Ltd. [1999] 239 ITR 471 (Mad 5 CIT v Prabhu Dayal [1971] 82 ITR 804(SC) 6 CIT v Baaji Chitra Mandir [1985] 154 ITR 777 (AP) 7 Break, Inspector of taxes v Robson [1942] 25 Tax case 33(HL) 8 CIT v Best & Co. (P) Ltd. [1966] 60 ITR 11 (SC) 9 Genboig Un…

Commissioner of Income Tax-III vs. M/S Subhash Kabini Power Corporation Limited

ITA/169/2015HC Karnataka29 Mar 2016

Bench: B.V.NAGARATHNA,JAYANT PATEL

Section 260Section 263Section 80I

…ue also relied upon the decision of the Apex Court in the case of Oberoi Hotel (P) Ltd. v. Commissioner of Income Tax [(1999) 103 Taxman 236 (SC)] and another decision in the case of Kettlewell Bullen & Co. Ltd. v. Commissioner of Income Tax [(1964)53 ITR 261] and contended that unless there is any adverse effect to the trading structure of the business, the income received cannot be termed as capital receipt. 11. In our view, the aforesaid decisions are of no help to the Revenue for the reason that to find out whether the particular amount received is a capital receipt or income out of busine…

The Commissioner of Income Tax vs. Hcl Infosystems Ltd

ITA/167/2003HC Delhi21 Dec 2015
Section 260A

…lace. In the present case the first question that arises is whether the amount received by the Assessee pursuant to termination of the JVA was compensation for the transfer of a capital asset. 27. In Kettlewell Bullen & Co. Ltd. v. CIT, Calcutta (1964) 53 ITR 261 (SC) the Appellant, Kettlewell Bullen & Co. Ltd. (‘KBCL’) was a managing agent of six companies including Fort Williams Jute Co. (FWJC). KBCL entered into an agreement with Mugneeram Bangur & Co. (MBC), whereunder MBC agreed to purchase the entire shareholding of KBCL in FWJC; procure repayment of all the loans advanced by KBCL to FWJC and t…

Khanna and Annadhanam vs. Commissioner of Income Tax

In the result we answer the substantial question of law by holding

ITA - 1286 / 2008HC Delhi29 Jan 2013
For Appellant: Mr Ajay Vohra, Ms Kavita Jha and Mr SomnathFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel with Mr
Section 260A

…, the compensation received can only be capital in nature. 5. We think that there is a good deal of force in the contention of the 2013:DHC:430-DB ITA No.1286 /2008 Page 4 of 9 assessee. In Kettlewell Bullen & Co. Ltd. v. CIT: (1964) 53 ITR 261 the Supreme court drew a distinction between the compensation received for injury to trading operations arising from breach of contract or from the exercise of sovereign rights and compensation received as solatium for loss of office. It was held that the compensation received for loss of an asset of enduring value would be regarded as capit…

Khanna and Annadhanam vs. Commissioner of Income Tax

In the result we answer the substantial question of law by holding

ITA/1286/2008HC Delhi29 Jan 2013
For Appellant: Mr Ajay Vohra, Ms Kavita Jha and Mr SomnathFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel with Mr
Section 260A

…, the compensation received can only be capital in nature. 5. We think that there is a good deal of force in the contention of the 2013:DHC:430-DB ITA No.1286 /2008 Page 4 of 9 assessee. In Kettlewell Bullen & Co. Ltd. v. CIT: (1964) 53 ITR 261 the Supreme court drew a distinction between the compensation received for injury to trading operations arising from breach of contract or from the exercise of sovereign rights and compensation received as solatium for loss of office. It was held that the compensation received for loss of an asset of enduring value would be regarded as capit…

The Commissioner of Income Tax vs. M/s.Globe Organics Ltd

ITTA/585/2006HC Telangana24 Apr 2012

Bench: V.ESWARAIAH,K.G.SHANKAR

Ansal Properties & Industries Ltd vs. Commissioner of Income Tax

ITA - 183 / 2008HC Delhi19 Nov 2010

…2010:DHC:5594-DB ITA No.183/2008 Page 12 of 31 (v) Bombay Burmah Trading Corporation Ltd., 81 ITR 777 (Bom.) & (vi) Kettle Well Bullen & Co. Ltd. vs. CIT, 53 ITR 261 (SC).” 13. The question for our consideration, therefore, is whether the amount received by the appellant pursuant to the agreement dated 30th October, 2000, between the DCM and the appellant is to be treated as a capital receipt or a revenue receipt. 14. It is trite that the question whether any particular receipt is income or not will…

(M/S. Ansal Properties & Infrastructure Ltd.) vs. Commissioner of Income Tax (Central-I)

ITA/183/2008HC Delhi19 Nov 2010

…2010:DHC:5594-DB ITA No.183/2008 Page 12 of 31 (v) Bombay Burmah Trading Corporation Ltd., 81 ITR 777 (Bom.) & (vi) Kettle Well Bullen & Co. Ltd. vs. CIT, 53 ITR 261 (SC).” 13. The question for our consideration, therefore, is whether the amount received by the appellant pursuant to the agreement dated 30th October, 2000, between the DCM and the appellant is to be treated as a capital receipt or a revenue receipt. 14. It is trite that the question whether any particular receipt is income or not will…

Sardar Exhibitors P.Ltd vs. DCIT, Company Circle

ITA - 735 / 2007HC Delhi09 Nov 2009

…he other hand, the compensation is for loss of property or some other injury to capital, it would constitute capital receipt. This principle has been accepted by the Supreme Court in the case of Kettlewell Bullen and Co. Ltd., Vs. Commissioner of Income Tax [53 ITR 261 (SC)] in principle is disclosed. Where on a consideration of circumstances, payment is made to compensate a performance for cancellation of a contract which does not affect the trading structure of his business, nor deprive him of what in substance is his source of income, termination of the contract being a normal incident of the business, and s…