Lease assignment consent payment held capital in nature, not taxable as income under the Income-tax Act.

A payment received for consenting to assignment of a lease and waiving related rights was treated as capital in nature rather than revenue income. The court focused on what the assessee gave up in return: release of the original lessee from lease obligations and surrender of rights to enforce recurring rent and repair covenants, which were elements of capital character. A separate part of the amount attributable to consent for filling in the tank was also not revenue. On that basis, the receipt was not taxable as income, and the question whether it was casual or non-recurring did not arise.

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Issues: Whether the sum of Rs. 50,000 received by the assessee for consenting to the assignment of the lease and waiver of related rights was a revenue receipt taxable under the Income-tax Act.

Analysis: The receipt had to be examined by reference to what the assessee parted with in return for the money. The consent to the assignment released the original lessee from obligations under the lease and involved surrender of the assessee's right to enforce recurring rent and repair covenants against the original lessee, which was an element of capital character. A distinct part of the sum was also referable to consent for filling in the tank, and that part was not revenue in nature. Since the receipt was held to be capital in character, the question whether it was casual or non-recurring did not arise for decision.

Conclusion: The amount of Rs. 50,000 was not a revenue receipt and was not taxable as income in the assessee's hands.

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