Interim Compensation Not Taxable Until Final Court Settlement

Pratima Reddy Muthu Vs ACIT (ITAT Hyderabad) summary & heading Interim Compensation Not Income: ITAT Hyderabad Defers Taxability to Year of Final Settlement Hyderabad ITAT ‘A’ Bench, in Pratima Reddy Muthu vs. ACIT (ITA No.1310/Hyd/2025, AY 2010-11, order dated 24.12.2025), partly allowed the assessee’s appeal involving taxability of large compensation received pursuant to civil court decrees. The Assessee, widow and legal representative of late Shri Muthu Mohan Reddy, received 50% of decretal compensation and costs during AY 2010-11 pursuant to an interim order of the Jurisdictional...