SEC Whistleblower Award was held taxable: ITAT rejected claim of capital receipt and windfall gain

Premal P. Pandya Vs DCIT (ITAT Ahmedabad) Conclusion: Whistleblower reward of Rs. 8.16 crore received by the assessee from the U.S. SEC for providing information and substantial assistance in enforcement proceedings was a taxable revenue receipt. The amount was neither a capital receipt nor a windfall gain and was chargeable to tax under the head “Income from Other Sources”. Held: Assessee, an individual deriving salary income, received USD 2.18 million as a whistleblower reward from the U.S. Securities and Exchange Commission (SEC) under its statutory whistleblower programme. After paymen...