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2017 (5) TMI 964 - ITAT KOLKATAAccrual of income - forfeiture of share warrants - whether treated as capital receipt in nature? - Held that:- In the instant case, the share warrant money was forfeited as per the terms of the issue. This fact is not in dispute. It is settled position of law that by charging provisions of section 4 and 5, the general liability to tax is imposed upon income but the Income Tax Act does not provide that whatever is received by the assessee must be regarded as income chargeable to tax. Besides, if the initial receipts of a business are not trading receipts in the hands of the recipient, subsequent operations cannot turn them into trading receipts. Therefore, the addition made by AO on account of forfeiture of share warrants as capital receipt in nature, needs to be deleted. - Decided against revenue
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