Compensation on termination of Joint venture agreement not liable to capital gain tax if received / accrued before 01/04/2003

Brief of the Case

Delhi High Court held In the case of CIT vs. HCL Infosystems Ltd. that the receipt by the Assessee as a result of the termination of the JVA during AY 1998-99 was a capital receipt but in light of Section 55 (2) (a) as it stood at the relevant time, the said amount cannot be brought to capital gains tax. At the relevant time, there was no provision in regard to determining the cost of acquisition of the above intangible assets for the purposes of computing capital gains tax.

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