Capital receipt treatment for partial copyright assignment confirmed where payment was for parting with a proprietary interest.

A lump sum received for a partial assignment of motion picture copyright was treated as a capital receipt because the agreement transferred part of the proprietary interest, not a mere licence for temporary use. Under the Copyright Act, 1911, copyright could be assigned wholly or partially, and payment for parting with part of a capital asset is not revenue merely because the asset may be commercially exploited. The amount was therefore not chargeable as annual profits or gains under Case VI of Schedule D.

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Issues: Whether the lump sum received for a partial assignment of motion picture rights in copyright was a capital receipt or a revenue receipt chargeable as annual profits or gains under Case VI of Schedule D.

Analysis: The agreement was construed as an assignment, not a mere licence, because copyright under the Copyright Act, 1911 could be assigned wholly or partially and the transaction transferred part of the proprietary interest for a limited period. The payment was made for parting with part of a capital asset, not for the temporary user of property by an unchanged owner. A sum received on the sale of property by a person not engaged in the trade or business of dealing in such property is not assessable as annual profits or gains merely because the property may be commercially exploited.

Conclusion: The amount was a capital receipt and was not chargeable under Case VI of Schedule D.

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