2002 (6) TMI 39 - HC - Income Tax

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs.9,82,068 being the amount received under the arbitration award for the work done in connection with the feeder canals for the Farakka Barrage Project during the period January 1, 1966 to September 30, 1969, was not a revenue receipt but only a capital receipt in the hands of the assessee? - 2. Whether, on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the source being the work executed by the firm and that as it passed on to the assessee, Shri J.H. Tarapore in terms of the settlement deed, it can only be an application of income? - we would answer the questions referred against the assessee and in favour of the Revenue.

Summary

The High Court of Madras ruled that the sum received under an arbitration award for work done on the Farakka Barrage Project was considered a revenue receipt and not a capital receipt. The court decided in favor of the Revenue, stating that the amount in question was to be assessed as income in the hands of the assessee.