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| The Tax Publishers2019 TaxPub(DT) 4845 (Mum-Trib) : (2019) 179 ITD 0154 : (2020) 205 TTJ 0929 INCOME TAX ACT, 1961
Section 4
Assessee had not received compensation in the course of its business but on account of extinction of its right to sue the owner in pursuance of development agreement, therefore, compensation amount had to be construed as capital receipt, and not revenue receipt.
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Income - Capital or revenue receipt - Compensation received in lieu of surrender of right to sue owner in pursuance of development agreement -
Assessee, a partnership firm, engaged in financing, construction and development received compensation under agreement for relinquishing its right to sue in a development agreement. AO taxed the same as revenue receipt. Held: Assessee had not received compensation in the course of its business but on account of extinction of its right to sue the owner in pursuance of development agreement, therefore, compensation amount had to be construed as capital receipt and not revenue receipt.
Relied onCIT v. Abbasbhoy A. Dehgamwalla & Ors. (1992) 195 ITR 28 (Bom) : 1992 TaxPub(DT) 475 (Bom-HC)CIT, Delhi (Central) v. J. Dalmia (1984) 149 ITR 215 (Del) : 1984 TaxPub(DT) 1499 (Del-HC)Bhojison Infrastructure (P) Ltd. v. The ITO, Ahmedabad in (I.T.A. No. 2449/Ahd/2016, dt. 17-9-2018) : 2018 TaxPub(DT) 6243 (Ahd-Trib)ACIT-16 (1), Mumbai v. Shri Jackie Shroff in (ITA No. 2792/Mum/2016, dt. 23-5-2018) : 2018 TaxPub(DT) 5806 (Mum-Trib)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
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