Source determines tax character: replantation fund receipts from rubber trading were treated as revenue income, not capital.

Amounts received from the replantation fund were held to be revenue receipts, because their character was determined by their source in cess or export duty levied on rubber production and export, not by the statutory requirement that they be applied for replanting. The fact that the money was linked to plantation expenditure and routed through a statutory fund did not alter its nature when received. As the amounts were carved out of trading operations and merely channelled to plantation owners, they were assessable as income and not as capital receipts.

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Issues: Whether amounts received from the replantation fund constituted income assessable to tax or capital receipts.

Analysis: The source of the receipts was the cess or export duty levied on rubber production and export and credited to the statutory fund. The character of a receipt is determined by its source, not by the manner in which the recipient is required to apply it. Although the payments were linked to replanting expenditure and compliance with conditions, that use did not alter the character of the money when received. The statutory scheme showed that the amounts were carved out of trading operations in rubber and merely channelled through a fund before payment to plantation owners.

Conclusion: The receipts were revenue in nature and were rightly assessed as income, not capital.

Final Conclusion: The references were answered against the assessees, and the receipts were held taxable as revenue receipts.

Ratio Decidendi: The character of a receipt depends on its source and origin in the trading process, and a statutory condition requiring application of the money for replanting does not convert a revenue receipt into a capital receipt.

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