https://www.taxtmi.com/caselaws?id=6660 The tax character of salami or premium under a mining lease depends on the substance of the transaction, not the label used in the lease deed. Salami is not income in law, but where the facts show that the premium has been inflated by capitalising future royalty, the taxing authorities may treat the affected portion as revenue receipt. On the stated facts, the sharp increase in salami, reduced royalty, link with the earlier prospecting lease, and comparable lease arrangements supported the view that most of the amount represented advance royalty. Accordingly, only Rs. 20,000 was treated as capital receipt, and the balance of Rs. 2,00,000 was assessed as revenue receipt. en-us Wed, 22 Dec 1965 00:00:00 +0530 Sat, 31 Jan 2009 16:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6660 The tax character of salami or premium under a mining lease depends on the substance of the transaction, not the label used in the lease deed. Salami is not income in law, but where the facts show that the premium has been inflated by capitalising future royalty, the taxing authorities may treat the affected portion as revenue receipt. On the stated facts, the sharp increase in salami, reduced royalty, link with the earlier prospecting lease, and comparable lease arrangements supported the view that most of the amount represented advance royalty. Accordingly, only Rs. 20,000 was treated as capital receipt, and the balance of Rs. 2,00,000 was assessed as revenue receipt. Case-Laws Income Tax Wed, 22 Dec 1965 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6660