Taxable or not

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CA Keyur Shah (Querist)
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13 January 2010 My frnd got an accident. The other party is ready to give the amount to him.
The actual exp. of hospital is around Rs.8,00,000/-
and the amount receive from the other party is Rs. 12,00,000/-

What amount is chargeable to tax????

i think that no amount is chargeable to tax because it is a capital receipt...

please give ans wid relevant xec. or case laws if any...

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 January 2010 If the person who has been given any compensation for motor accident or any accident,is permanently disabled because of accident,such receipt is considered as Capital receipt which is not taxable. Whereas ,if the disablement is temporary,payment of claim in that case is taxable. The case law related to the issue is
Vinod Kumar Vs. Income-Tax Officer 32 ITD 254.

CA Keyur Shah

CA Keyur Shah (Querist)
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13 January 2010 sir,
thanks for reply.
in this case there is an injury in his head.
and it might be possible his efficiency can be affeted...

andwhich amount is taxable Rs. 12 lacs or Rs. 4 lacs i.e. after deducting exp. of rs. 8 lacs..

can u give the full details of this case law if possible..
my email id is keyurshah_87@hotmail.com

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