Compensation for extinction of right to sue was capital receipt not chargeable to tax

Chheda Housing Development Corporation Vs ACIT (ITAT Mumbai)

Conclusion: Where amount received by assessee in excess of advance was on account of compensation for extinction of its right to sue the owner, the receipt was a Capital receipt not chargeable to tax.

Held: During the assessment proceeding, AO noted that assessee had received Rs. 20 Crore as compensation, which was inclusive of advance of Rs.2.50 Crore paid by assessee. Assessee claimed the receipt of Rs. 20 Crore as capital receipt not chargeable to tax. Assessee recei

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