Compensation for business termination resulting in Income Source Loss is Capital Receipt

DCIT Vs Rishabh Infrastructure Pvt. Ltd. (ITAT Raipur) Conclusion: Compensation received by assessee on closure of business activity was for sterilization of the profit making apparatus of assessee-company; therefore, the same was capital receipt. Held: In the case of Karam Chand Thapar & Brokers (P) Ltd. Vs. CIT reported in 80 167 it was held that where, on a consideration of the circumstances, payment is made to compensate a person for cancellation of a contract which does not affect the trading structure of his business, nor deprive him of what in substance is his source of income, term...