Section 2(4) of the Indian Income-tax Act, 1922

Section 2(4) of the Indian Income-tax Act, 1922 — the law in short

What the courts have decided on section 2(4) of the Indian Income-tax Act, 1922, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Karanpura Development Co Ltd v CIT Supreme CourtHelps department
  My company acquired mining leases, developed the land and sub-let it for a premium. Is the premium a capital receipt or business profit?
  Business profit, on these facts. The Supreme Court held that the company, formed to acquire coal-mining rights and to turn them to account, was carrying on business when it took head leases at a salami of Rs 40 a bigha, developed the fields and granted sub-leases at Rs 400 a bigha. The excess was profit of that business, not appreciation of capital. The Court said ownership and letting may be done as part of a business or as a landowner, and which it is depends on the object with which the act is done. Assessable under the business head.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.