18 December 2015
A WITHOUT INFORMING B USED HIS TRADEMARK.2 MONTHS LATER B CAME TO KNOW ABOUT THIS FACT AND FILED A CASE AGAINST A.COURT ORDERED A TO PAY 50,00,000 TO B FOR MISUSE OF HIS TRADE NAME.LOSS OF PROFITS FOR 2 MONTHS 15,00,000 NOT INCLUDED IN COMPENSATION ORDERED BY COURT.
1.UNDER WHICH HEAD IT IS TAXABLE AND WHY? 2.WHAT ARE THE EXPENSES HE CAN CLAIM LIKE SUIT FILE EXPENSES. 3.CAN B CLAIM LOSS OF PROFITS DUE TO LOSS OF CUSTOMERS. 4.IS TRANSFER IN THE ABSENCE OF WILLFULNESS, TREATED AS TRANSFER AS PER IT ACT.COMPARE WITH COMPULSORY ACQUISITION BY GOVT.
18 December 2015
Dear Madhu Does the amount you receive is for the compensation for loss or else.
1. If it is compensation for loss i.e it is a revenue income taxable under head PGBP i.e business income. 2. ANy expense related with the litigation is allowed as expense. i.e advocate fees, conveyance , other litigation expenses. 3. Claim of Loss i.e Rs.1500000/- is a notional figure. and notional losses are not allowed in income tax. Hence cannot claim such loss. 4.Query no.4 not clear pls elaborate.
21 December 2015
thank you.actual loss of profits is 65,00,000 but after long debate court ordered 50,00,000.can i claim remaining 15 lakhs loss while filing it return.
21 December 2015
Dear MAdhu bau as you say loss was Rs.65lacs but dear this is a notional loss. Since court has considered 50lacs as loss now you cannot claim rest 15lacs as loss uner income tax.
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