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Whether Compensation received for termination of the joint venture is capital or Revenue receipt?
Case Law Details
- Case Name
- ITO Vs M/s Mechanalysis (India) Ltd. (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2003- 04
- Courts
- All ITAT, ITAT Mumbai
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ITO Vs M/s Mechanalysis (India) Ltd. (ITAT Mumbai)- Whether when the agency agreement between the assessee and the non-resident continues even after expiry but no royalty is paid during this period, compensation paid to the assessee after many years later for formal termination of the agreement is akin to loss of profit-making apparatus, and thus, is capital receipt?
The assessee had entered into an agreement for joint venture with IRD Mechan analysis Inc. USA on 11.3.1979. It was subsequently renewed on 12.10.1990. Under the agreement the applicant company was entitled to make use of the tra...
