No tax on Mesne Profits for wrongful deprivation of use & occupation of property

ITO Vs Shri Kamal Kumar Ghosh (ITAT Kolkata) It is not in dispute that the amount received in the sum of Rs 90,00,000/- (assessee’s share of 50%) was only for surrendering his leasehold rights. The assessee treated the same as mesne profits and hence capital receipt whereas the ld AO treated the same as revenue receipt. Now the short question is whether the said mesne profits would be liable for tax in the hands of the assessee. We find that the definition of mesne profits is provided in section 2(12) of Code of Civil Procedure 1908 as under:- “Mesne Profits of Property means those profits...