DY.C.I.T. 1(2), RAIPUR (CG) vs. M/S RISHABH INFRASTRUCTURE PVT.LTD, RAIPUR

ITA 157/BIL/2014Status: DisposedITAT Raipur23 October 2018AY 2011-1226 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the compensation received was for the termination of an agency/contract which impaired the assessee's trading structure or resulted in the loss of its source of income. Therefore, it was considered a capital receipt.

What were the facts?

The assessee received Rs. 3,01,47,107/- as compensation for the termination of an MOU with Lafarge India Pvt. Ltd. The Assessing Officer treated this amount as revenue receipt, arguing it was consideration for facilitating land acquisition and providing services. The assessee contended it was a capital receipt due to the loss of its profit-making apparatus.

What were the issues?

Whether the compensation received for the termination of an MOU is a revenue receipt or a capital receipt. Whether the termination of the contract affected the assessee's trading structure or source of income.

Which sections of the Income-tax Act were involved?

Section 44AB

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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SH. R.K. PANDA & MS. SUCHITRA KAMBLE

Hearing: 08/08/2018Pronounced: 23/10/2018

PER R.K. PANDA, AM:

This appeal filed by the revenue is directed against the order dated 06.06.2014 of the CIT(A), Raipur (CG) relating to A. Y. 2011-12. 2. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 24.09.2011 declaring total income of Rs.23,33,570/-. During the year under consideration, the assessee derived income from interest chargeable under the head “Income from Profit & Gains of Business”. The accounts of its business were audited as required u/s 44AB of the I.T. Act, 1961. During the course of scrutiny proceeding, the AO noticed that an amount of Rs.3,01,47, 107/- is credited to the head “Reserve and

The order continues below.

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