Compensation for pre-closure of Contract Manufacturing Agreement is non-taxable Capital Receipt

Sai Mirra Innopharm Private Limited Vs ITO (ITAT Chennai)

On perusal of details filed by the assessee, we find that the assessee has entered into a contract manufacturing agreement with Dr.Reddy’s Laboratories Ltd., for a period of 10 years for manufacturing of drugs as per the specification provided by the principals, but the know-how required for manufacturing of drugs is not possessed by the assessee. Subsequently, Dr.Reddy’s Laboratories Ltd., has terminated the contract before the completion of contract period for t

Please become a Premium member. If you are already a Premium member, login here to access the full content.