Post-death contractual commission received by executors was capital receipt, not taxable income in their hands.

Executors' post-death receipt of commission under the deceased's pre-existing agreement was treated as capital, not income. The payment arose from contractual rights already earned by the deceased and was received by the executors only on the agreement's terms after death, without any profit-making activity by them. Because the amount was attributable to services rendered before death and had also been treated as part of the estate in separate litigation, with estate duty paid on that basis, it was characterised as an estate asset. It was therefore not assessable as the executors' income for the relevant assessment year.

---

---

Issues: Whether the amount of Rs. 41,471 received by the executors under the deceased's agreement was assessable in their hands as income for the assessment year 1958-59, or was a capital receipt forming part of the estate.

Analysis: The amount represented commission payable under the deceased's pre-existing contractual right and was received by the executors only because the agreement provided for payment after termination and death. It was not earned by any profit-making activity of the executors and was attributable to services rendered by the deceased before his death. The amount had already been treated as part of the deceased's estate in the separate litigation between the heirs and the executors, and estate duty had been paid on that basis, which supported its character as an estate asset rather than current income of the executors.

Conclusion: The amount was a capital receipt in the hands of the executors and was not assessable as their income for the relevant assessment year.

Ratio Decidendi: A post-death receipt by executors under a deceased's contractual entitlement, which represents realisation of a capital asset belonging to the estate and not profit from any activity of the executors, is a capital receipt and not taxable income in their hands.

---