MILAN SAINI,GURGAON vs. DCIT, CIRCLE- 2 , GURGAON

ITA 2335/DEL/2018Status: DisposedITAT Delhi28 October 2025AY 2014-15Bench: SHRI M BALAGANESH (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)24 pages
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What did the Tribunal hold?

The Tribunal held that the compensation received by the assessee for relinquishing his 'right to sue' was a capital receipt and not taxable as capital gains. The CIT(A)'s order treating it as taxable income was set aside.

What were the facts?

The assessee received compensation of Rs. 33,12,18,930/- from Cinepolis Group for relinquishing his right to sue and settling disputes. The Assessing Officer and CIT(A) treated this compensation as taxable income under various heads like salary, business income, or capital gains.

What were the issues?

Whether the compensation received for relinquishing a 'right to sue' is a capital receipt not chargeable to tax as capital gains.

Which sections of the Income-tax Act were involved?

Section 45,Section 2(47),Section 6(e),Section 54

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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: SHRI M BALAGANESH & SHRI VIMAL KUMAR

For Appellant: Shri Ajay Vohra, Sr. Adv, Shri Deepesh Garg, Adv. & Ms
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 11.08.2025Pronounced: 28.10.2025

PER VIMAL KUMAR, JUDICIAL MEMBER:

The appeal filed by assessee is against order dated 22.01.2018 of Learned Commissioner of Income-Tax (Appeals)-1, Gurgaon (hereinafter referred as “the Ld. CIT(A)”) under Section 250(6) of the Income Tax Act, 1961 ( hereinafter referred as “the Act”) arising out of assessment order dated 22.12.2016 of the Learned Assessing Officer/Deputy Commissioner of Income Tax, Circle-2, Gurgaon (hereinafter referred as “Ld. AO") under Section 143(3) of the Act for assessment year 2014-15. 2. Brief facts of case are that the assessee filed return of income declaring an income of Rs 33,79,30,580/- on 31.07.2014. The return was processed under Sec

The order continues below.

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