Compensation for Non-Performance of Capital Asset Guarantee is Capital Receipt: ITAT Kolkata

Essel Mining & Industries Limited Vs ACIT (ITAT Kolkata) ITAT Kolkata held that compensation received for failure of performance guarantee parameter of capital assets [Wind Turbine Generators] is in nature of capital receipt and hence outside the purview of taxation. Accordingly, appeal of assessee allowed. Facts- The assessee is engaged in the manufacture of iron ores, nitrogen gas and ferro-alloys and also generation of electricity and manufacture of railway sidings for captive use. The assessee had entered into two contracts with M/s Suzion Energy Limited (SEL) for purchase of 48 Nos. a...