P.H. Divecha v. CIT

48 ITR 222Supreme Court of India1963#3594 most cited

What is P.H. Divecha v. CIT authority for?

Distinguishing between capital and income receipts, and between trading and non-trading profits, involves questions of law to be drawn from the facts. A voluntary payment, for which the recipient has no legal right to compensation, may not be taxable.

33

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 1992 to 2025.

Also referred to as

P.H. Divecha v CIT · capital vs income · trading profit · non-trading profit · voluntary payment · taxability of receipt · section 2(13) · section 28(i) · section 45

Read the full judgment

Issues it is cited on

section 2(13)non-compete feesection 28(i)section 28(iv)section 43(1)commercial rightsright to receivefull value of considerationlack of enquirysection 45section 48section 40(a)(i)

Judgments citing P.H. Divecha v. CIT

ACIT, New Delhi vs. M/S. Jagat Ram Trehan & Sons, New Delhi

In the result, the Appeal filed by the Revenue stands dismissed

ITA 5404/DEL/2011[2007-08]Status: DisposedITAT Delhi29 Mar 2017AY 2007-08

Bench: Shri H.S. Sidhu & Shri L.P. Sahu

For Appellant: Sh. R.S. Singhvi, CA & Sh. SatyajitFor Respondent: Sh. Umesh Chand Dubey, Sr. DR
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 28

…5 received were not on 'account: of any work done or likely to be done, but for loss of income earning apparatus. Damages were for injury inflicted on income earning apparatus of assessee. Hon'ble Supreme Court in the case of P. H. Divecha & Anr. Vs CIT - 48 ITR 222 held that compensation received on termination of agency was capital receipt not taxable as revenue receipt. Hon'ble Madras High Court in the case of CIT vs. T. 1. & M. Sales Ltd, 259 ITR 116 held that compensation for impairment of profit making apparatus was capital receipt. It was also observed by Hon'ble Supreme Court in the case of reported…

M/S Givo Ltd., New Delhi vs. DCIT, New Delhi

In the result, appeal filed by the assessee stands allowed for statistical purposes

ITA 2041/DEL/2013[2006-07]Status: DisposedITAT Delhi27 Jul 2016AY 2006-07

Bench: Shri G. D. Agrawal, Hon’Ble & Smt. Beena A. Pillai

For Appellant: Shri Vinod Kumar Bindal, CAFor Respondent: Shri T. Vasanthan, Sr. DR
Section 143(1)Section 143(2)Section 41(1)

…a real source of income, will fall in the category of income, which is taxable under the Act." 9 I.T.A.No.2041/Del/2013 (xii)The motive of payer is not relevant while deciding whether a receipt is revenue or capital in nature. [Po H. Divecha V. CIT, (1963) 48 ITR 222 (SC)] (xiii)In the judgment of the Board in the case of Raja Bahadur Kamakshya Narain Singh of Ramgarh V. CIT [1943] 11 ITR 513 (PC), delivered by Lord Russell of Killowen, their Lordships of the Privy Council, after referring to the aforesaid two decisions, have observed as follows (p. 522): "The word 'income' is not limited by the words 'profit…

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)

…rst part, he held that the said receipt was a non- recurring nature and is not likely to recur again and therefore, neither it is income of a casual nature nor of a non- recurring nature. In support, he relied upon a decision of: - i) P H Divecha v CIT [1963] 48 ITR 222 (SC); and ii) CIT v M Rama Lakshmi Reddy [1981] 131 ITR 415(Mad); On the second part, whether it is a compensation under section 28(ii), he held that the said payment do not fall in any of the sub-clauses of clause (ii) of section 28, therefore it is beyond ambit of section 28 also. On the third part, he held that the settlement agreement specif…

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)

…rst part, he held that the said receipt was a non- recurring nature and is not likely to recur again and therefore, neither it is income of a casual nature nor of a non- recurring nature. In support, he relied upon a decision of: - i) P H Divecha v CIT [1963] 48 ITR 222 (SC); and ii) CIT v M Rama Lakshmi Reddy [1981] 131 ITR 415(Mad); On the second part, whether it is a compensation under section 28(ii), he held that the said payment do not fall in any of the sub-clauses of clause (ii) of section 28, therefore it is beyond ambit of section 28 also. On the third part, he held that the settlement agreement specif…

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)

…rst part, he held that the said receipt was a non- recurring nature and is not likely to recur again and therefore, neither it is income of a casual nature nor of a non- recurring nature. In support, he relied upon a decision of: - i) P H Divecha v CIT [1963] 48 ITR 222 (SC); and ii) CIT v M Rama Lakshmi Reddy [1981] 131 ITR 415(Mad); On the second part, whether it is a compensation under section 28(ii), he held that the said payment do not fall in any of the sub-clauses of clause (ii) of section 28, therefore it is beyond ambit of section 28 also. On the third part, he held that the settlement agreement specif…

M/S Smt Mahindro Devi, Karnal vs. AO, Karnal

In the result, all above three appeals of the assessee are allowed

ITA 488/DEL/2016[2010-11]Status: DisposedITAT Delhi16 May 2016AY 2010-11

Bench: Smt Diva Singh & Shri Prashant Maharishi

For Appellant: Sh. J. S. Sharma, AdvFor Respondent: Sh. Ravi Jain, CIT DR
Section 143(3)Section 147Section 148Section 15Section 2(24)Section 57Section 80C

…same as in the case of Mrs. Jaya Bhaskaran where the eldest surviving child was to be nominated as partner i.e. it was an the assurance given to the partners to support their legal heirs in future. He further submitted that in the case of P.H. Divecha vs. CIT 48 ITR 222 (SC) also the payment made to that assessee also did not relate to any business or to loss of profits, which has been held to be not taxable. 7. We have heard both the rival parties and perused the material available on record. The only issue involved in this appeal is whether the amount received by the assessee, after the death of her husband fro…

M/S Smt Mahindro Devi, Karnal vs. AO, Karnal

In the result, all above three appeals of the assessee are allowed

ITA 487/DEL/2016[2009-10]Status: DisposedITAT Delhi16 May 2016AY 2009-10

Bench: Smt Diva Singh & Shri Prashant Maharishi

For Appellant: Sh. J. S. Sharma, AdvFor Respondent: Sh. Ravi Jain, CIT DR
Section 143(3)Section 147Section 148Section 15Section 2(24)Section 57Section 80C

…same as in the case of Mrs. Jaya Bhaskaran where the eldest surviving child was to be nominated as partner i.e. it was an the assurance given to the partners to support their legal heirs in future. He further submitted that in the case of P.H. Divecha vs. CIT 48 ITR 222 (SC) also the payment made to that assessee also did not relate to any business or to loss of profits, which has been held to be not taxable. 7. We have heard both the rival parties and perused the material available on record. The only issue involved in this appeal is whether the amount received by the assessee, after the death of her husband fro…

M/S Smt Mahindro Devi, Karnal vs. AO, Karnal

In the result, all above three appeals of the assessee are allowed

ITA 486/DEL/2016[2008-09]Status: DisposedITAT Delhi16 May 2016AY 2008-09

Bench: Smt Diva Singh & Shri Prashant Maharishi

For Appellant: Sh. J. S. Sharma, AdvFor Respondent: Sh. Ravi Jain, CIT DR
Section 143(3)Section 147Section 148Section 15Section 2(24)Section 57Section 80C

…same as in the case of Mrs. Jaya Bhaskaran where the eldest surviving child was to be nominated as partner i.e. it was an the assurance given to the partners to support their legal heirs in future. He further submitted that in the case of P.H. Divecha vs. CIT 48 ITR 222 (SC) also the payment made to that assessee also did not relate to any business or to loss of profits, which has been held to be not taxable. 7. We have heard both the rival parties and perused the material available on record. The only issue involved in this appeal is whether the amount received by the assessee, after the death of her husband fro…

Aroon Purie vs. Commissioner of Income Tax

ITA-232/2002HC Delhi27 Mar 2015
Section 10Section 260A

…s. Rejecting the contention of the assessed that payments ought to be treated as casual in nature, it was held that the question of exemption does not arise as the assessed was unequivocally carrying on a vocation. 23. In Divecha (P.H.) vs. CIT, (1963) 48 ITR 222 (SC), it was observed that the motive and intent of the person who pays is not relevant and it is the nature of the receipt in the hands of the person who receives the same, which determines the quality of the receipt. However, for this purpose, one may examine the intent of the person paying/ donee. The quantum of the amount paid may not b…

Aroon Purie vs. Commr.of Income Tax

ITA - 232 / 2002HC Delhi27 Mar 2015
Section 10Section 260A

…s. Rejecting the contention of the assessed that payments ought to be treated as casual in nature, it was held that the question of exemption does not arise as the assessed was unequivocally carrying on a vocation. 23. In Divecha (P.H.) vs. CIT, (1963) 48 ITR 222 (SC), it was observed that the motive and intent of the person who pays is not relevant and it is the nature of the receipt in the hands of the person who receives the same, which determines the quality of the receipt. However, for this purpose, one may examine the intent of the person paying/ donee. The quantum of the amount paid may not b…

Aroon Purie vs. Commissioner of Income Tax

ITA/232/2002HC Delhi27 Mar 2015
Section 10Section 260A

…s. Rejecting the contention of the assessed that payments ought to be treated as casual in nature, it was held that the question of exemption does not arise as the assessed was unequivocally carrying on a vocation. 23. In Divecha (P.H.) vs. CIT, (1963) 48 ITR 222 (SC), it was observed that the motive and intent of the person who pays is not relevant and it is the nature of the receipt in the hands of the person who receives the same, which determines the quality of the receipt. However, for this purpose, one may examine the intent of the person paying/ donee. The quantum of the amount paid may not b…

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

ITTA/585/2006HC Telangana24 Apr 2012

Bench: V.ESWARAIAH,K.G.SHANKAR

Shrimand Padmaraja R. Kadambanda, Dhulia vs. The Commnr. of Income Tax, Pune

C.A. No.-002201-002203 - 1979Supreme Court22 Apr 1992
For Respondent: COMMISSIONER OF INCOME TAX, PUNE
Section 15Section 15(1)Section 15(1)(d)Section 2(24)Section 4

…ssion of the learned counsel is that in deter- mining whether payments constitute revenue receipt of not, regard must be had to the statutory provisions. The princi- ple to be applied is found in P.H. Divecha v Commissioner of Income-Tax, Bombay City 1, 48 ITR 222 at 231-32. It is nature and the quality of the payment and not he periodicity where of which constitute income. As a matter of fact, the periodicity was not held to be conclusive. A case similar to the one on hand is H.H. Maharani Shri Vijaykuverba Saheb of Morvi and Anr. (supra) wherein the High Court held that a voluntary payment w…