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Taxability of the compensation received

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Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2013 there was a contrat under which first party will pay Rs20Lacs to another party to start a join business but the second party defaulted and didnt start any business and then the first party filed a case againt the first party for Rs 35 Lacs but the Case was finally settled for rs 22 lacs ...

wheteher the balance amount of Rs 2Lacs(Rs22Lacs-Rs 20Lacs) will be taxable under Income tax act and if yes then under which hear of income and under which section????

TKKKKKK

TKKKKKK (Expert)
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11 May 2013 it is taxable u/s 56. under the head income from other sources. As business could not be started. you can claim expenditure of legal fees u/s 57.and remaining amount will be taxable. read this link
https://www.caclubindia.com/articles/understanding-income-from-other-source-with-latest-case-laws-14201.asp

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Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2013 thnx a ton sir....:)

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