Capital receipt treatment for transfer of unique letters confirmed; isolated transaction was not taxable as business income.

A receipt from handing over possession of letters of unique literary and sentimental value was treated as capital in nature because it did not arise from any business, vocation, or organised activity carried on by the assessee. The transaction was isolated, and the fact that the purchaser acted through an agent did not change the character of the receipt in the assessee's hands. Applying the distinction between trading receipts and capital receipts, the amount could not be taxed as income merely because consideration was paid for transfer of possession. The receipt was therefore held to be capital and not taxable as revenue income.

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Issues: Whether the amount received for handing over possession of the letters was a capital receipt or a revenue receipt chargeable to tax.

Analysis: The receipt arose from parting with letters of unique literary and sentimental value, not from any business, vocation, or organised activity carried on by the assessee. The transaction was an isolated one and the fact that the purchaser acted through an agent did not alter its character in the assessee's hands. Applying the distinction between trading receipts and capital receipts, the amount could not be treated as income merely because consideration was received for the transfer of possession.

Conclusion: The receipt was held to be capital in nature and not taxable as revenue income.

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