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2018 (11) TMI 323 - AT - Income TaxNature of receipt - ‘compensation for permanent loss of business or income generating asset’- revenue OR Capital receipt - as per AO payment received by the assessee company is in consideration of the efforts made by the assessee for facilitating the availability of land and for the services rendered by it although in the MOU - Held that:- After numerous rounds of deliberations & meetings between LIPL and the assessee company, MOU was executed on 31st January, 2009 leading to determination of compensation in lieu of cancellation/termination of the earlier MOU Dated 19th November, 2001 or in lieu of determination of its rights in the said MOU ultimately leading to loss of source of income. It is the construction of this MOU executed on 31st January, 2009 which ultimately decides the nature of receipt of the impugned amount termed as “Compensation”. We find the assessee correctly claimed such compensation as capital receipt being loss of source of income We find the assessee during the course of appeal proceedings had filed a certificate issued by LIPL where in they have certified that the compensation had been determined and paid by them for stalling the execution of the agreed work as above in terms of the earlier MOU. The above clarification issued by LIPL clearly shows that the compensation received by the assessee is for sterilization of the profit making apparatus of the assessee company. The various decisions relied on by Ld. Counsel for the assessee also support its case that the impugned receipt is capital in nature. - decided against revenue
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