Non-taxable capital receipt: share in pre-bifurcation reserve accepted on facts, with no question of law arising.

A sum received by the assessee was treated as a share in reserve held before bifurcation, not as taxable income, because the Tribunal's finding was based on the record and was neither shown to be illegal nor perverse. On that factual basis, the Revenue's challenge did not raise any question of law. The amount was therefore treated as a non-taxable capital receipt, and the reference was decided in favour of the assessee.

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Issues: Whether the sum of Rs. 32 lakhs received by the assessee was taxable as income or was a non-taxable share of reserve and capital receipt, and whether any question of law arose from the Tribunal's finding.

Analysis: The Tribunal recorded a factual finding, on the basis of the material on record, that the amount represented the assessee's share in the reserve held prior to bifurcation and was not income. That finding was not shown to be illegal or perverse, and the Revenue did not challenge the factual basis on which the amount was characterised as a share of reserve. In such circumstances, the dispute turned purely on facts and did not give rise to any question of law.

Conclusion: The amount of Rs. 32 lakhs was held not to be taxable income, and the reference was answered in favour of the assessee and against the Revenue.

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