Right to sue for damages is capital receipts hence not taxable

Virendra Bhavanji Gala Vs PCIT (ITAT Mumbai)

ITAT Mumbai held that damage on account of right to sue is a capital receipt and accordingly not chargeable to tax.

Facts- The assessee is an individual who entered into an MOU with Aadi Properties LLP with the intention to book commercial space to be developed and constructed in a proposed project by M/s. Aadi Properties LLP on a plot of land for consideration of Rs. 10,75,00,000/-. Accordingly, payment of Rs. 25,00,000/- by ch

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