compensation paid as per court order disallowed

This query is : Resolved

CA.PARAMASIVAM.K

CA.PARAMASIVAM.K (Querist)
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20 September 2009 Assessee run a factory with pollution board licence. But they use nearby lands for waste water storege.The land owners file a suit in HC for compensation. The court order to pay compensation. AO disallow this compensation as penalty. it's correct? Any case law is there?

Ram Avtar Singh

Ram Avtar Singh (Expert)
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20 September 2009 Read court verdict carefully. it will be self explanatory.

Rajeev

Rajeev (Expert)
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21 September 2009 i think compensation paid for using the lands would be capital /revenue in nature, depending on facts . the Ao is wrong in disallowing compensation as penalty, unless the courts verdict mentions that its a penalty .

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