Payment for relinquishment of operational rights of Hotel is revenue receipt

PCIT Vs ITC Limited (Calcutta High Court)

The case of PCIT vs. ITC Limited before the Calcutta High Court revolves around the taxation treatment of a substantial payment made by ELEL to ITC under the termination of an Operating License Agreement (OLA). This payment, amounting to Rs. 32.42 crores, is contested as either a capital receipt or a revenue receipt. The crux of the matter lies in determining whether this payment, received by ITC, constitutes income liable to tax.

Background and Operating License Agreement (OLA)

The dispute originated

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