2004 (5) TMI 522

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..... ed by the assessee. The relevant assessment year is 1997-98. 2. The assessee had sold an immovable property during the previous year relevant to the assessment year under appeal. Anyhow the sale of the property could not be registered as stipulated in the agreement for certain lapses on the part of the buyer. The terms of the agreement provided that the assessee would be compensated by way of dam .....

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..... were in fact in the nature of interest paid by the buyers against the belated payment of consideration and therefore it partook the character of revenue income. Therefore the entire amount was treated as taxable income by the lower authorities. This is the background of the case. 4. Now the first contention of the assessee is that the lower authorities has erred in treating the damages of Rs. 2, .....

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..... contract. There lies the fundamental difference. Therefore by no stretch of imagination, it is possible to hold that the amount of Rs. 2,51,250 was not in the nature of damages. Therefore we hold that the receipt was capital in nature therefore the Assessing Officer is not justified in bringing the entire amount of Rs. 2,51,250 into the computation of taxable income. 5. But at the same time we d .....

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