https://www.taxtmi.com/caselaws?id=180621 Compensation for cancellation of liquor contracts is capital in nature where the contracts form part of the profit-making apparatus rather than ordinary trading stock. The receipt is treated as capital when termination destroys or sterilises a fixed capital asset or the business apparatus itself; it is revenue only where compensation replaces trading profits from contracts entered into in the ordinary course of trade. Applying that distinction, the liquor contracts were the means of carrying on the business, and their cancellation affected the capital structure rather than generating trading income. The amount was therefore a capital receipt and not taxable as revenue income. en-us Thu, 24 Dec 1959 00:00:00 +0530 Wed, 30 Mar 2016 17:22:08 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=180621 Compensation for cancellation of liquor contracts is capital in nature where the contracts form part of the profit-making apparatus rather than ordinary trading stock. The receipt is treated as capital when termination destroys or sterilises a fixed capital asset or the business apparatus itself; it is revenue only where compensation replaces trading profits from contracts entered into in the ordinary course of trade. Applying that distinction, the liquor contracts were the means of carrying on the business, and their cancellation affected the capital structure rather than generating trading income. The amount was therefore a capital receipt and not taxable as revenue income. Case-Laws Income Tax Thu, 24 Dec 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=180621