Correct head of income - compensation/liquidation damages ...

Income Tax

January 13, 2022

Correct head of income - compensation/liquidation damages received on account of relinquishment of right in the property - The word saleable condition cannot be a deciding factor that the assessee wanted to acquire the project for its business activities. Admittedly, it appears to us that the scale of the business of the assessee was not significant enough to acquire such a huge property for its business activities and similarly there was not sufficient funds available with it which is discernible from the financial statement of the assessee. But, again we are not in agreement with the decision of the authorities below on this aspect. The assessee might have some financier or exploring for some joint-venture. - the amount of compensation received by the assessee is not chargeable to tax in the hands of the assessee. - AT

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