PANKAJ INDER WADHWA ,MUMBAI vs. INCOME TAX OFFICER CIRCLE 1(3)(1), MUMBAI

ITA 1733/MUM/2025Status: DisposedITAT Mumbai23 May 2025AY 2019-20Bench: SHRI SAKTIJIT DEY, V.P., SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the payment received by the assessee was not on account of termination or modification of any contract relating to business. The settlement was to avoid legal consequences arising from a suit filed to injunct BK Parties from business activities detrimental to the assessee. Therefore, the payment was for not exercising the right to sue and is a capital receipt, not taxable under the specified sections.

What were the facts?

The assessee received Rs. 3,68,38,400 from "BK parties" pursuant to a settlement agreement. The AO treated this as revenue receipt taxable under Section 28(ii)(e) and 28(va)(a) of the Income-tax Act. The CIT(A) upheld the AO's view.

What were the issues?

Whether the amount received under a settlement agreement, arising from a dispute involving a joint venture and related business activities, is a revenue receipt taxable under Section 28(ii)(e) or 28(va)(a), or a capital receipt not subject to tax.

Which sections of the Income-tax Act were involved?

Section 28(ii)(e),Section 28(va)(a),Section 143(1),Section 147,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, V.P. & SHRI BIJAYANANDA PRUSETH, AM

For Respondent: Shri Rajendra Joshi (Sr. DR)
Hearing: 15.05.2025Pronounced: 23.05.2025

Per Saktijit Dey, VP:

1.

This is an appeal by the assessee against the order dated 12.02.2025 passed by National Faceless Appeal Centre (NFAC), Delhi pertaining to Assessment Year (AYs) 2019-20. 2. The grounds raised by the assessee read as under:

“1. The learned National Faceless Appeal Centre [hereinafter referred as 'learned CIT(A)') has erred in upholding the action of learned National Faceless Assessment Centre [hereinafter referred as "learned AO'] in treating receipt of INR 3,68,38,400 from Nimblepace Packaging Private Limited and Others (collectively referred to as "BK parties") as taxable under section 28(ii)(e) and section 28(va) of the Income-tax A

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →