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2021 (11) TMI 751 - HC - Income TaxCharacterization of receipt - revenue or capital receipt - compensation received by the appellant from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets purchased by the appellant - HELD THAT:- It is settled legal position that there is no singular test available to determine whether a receipt is a capital receipt or a revenue receipt for which it is necessary that the Assessing Officer should examine the facts of each case. Therefore, we are of the considered view that the manner in which the Tribunal had interpreted the decision of Saurashtra Cement Ltd. [2010 (7) TMI 11 - SUPREME COURT] and come to a conclusion that it does not help the assessee is incorrect. The Tribunal is required to rely the legal proposition laid down in the Hon’ble Supreme Court as well as the other decisions which have been referred to by the Hon’ble Supreme Court. Matter requires to be remanded to the Tribunal for a fresh consideration to consider the legal issue which was decided by the Hon’ble Supreme Court in Saurashtra Cement Ltd. It goes without saying that the Revenue also will be given adequate opportunity by the Tribunal to put forth their contentions on the grounds canvassed by the assessee before us in this appeal. In the result, the appeal is allowed and the order passed by the Tribunal is set aside on the subject issue alone, namely, whether the compensation received by the assessee from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets, namely, wind turbine generators, purchased by the assessee was on revenue account made for reducing loss incurred in the course of business or a capital receipt outside the purview of taxation and the matter shall be remanded to the Tribunal for a fresh decision.
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