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2016 (5) TMI 686 - ITAT AHMEDABADTaxability of interest on compensation awarded by the MACT - revenue or capital receipt - Held that:- Relying upon the decision of the Hon’ble Punjab & Haryana High Court in Drawing and Disbursing Officer Versus Income Tax Officer [2011 (3) TMI 1671 - PUNJAB AND HARYANA HIGH COURT ], we hold that interest component in compensation awarded by MACT is part of compensation and has to be treated as capital receipt and not income till the assessee received the amount in pursuance of award. The interest earned by the assessee on the amount of compensation after its receipt will be taxed in accordance with law. In view of the aforesaid facts, we restore the issue back to the file of AO to rework the income in accordance with the aforesaid decision of Hon’ble P&H High Court and decide the issue.
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