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madhu babu (Querist)
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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.

Amol S Joglekar

Amol S Joglekar (Expert)
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18 December 2015 sorry 50,00,000 and 15,00,000...what is the relevance? I could not get. Please elaborate.

Ankur Singhal

Ankur Singhal (Expert)
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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.

madhu babu

madhu babu (Querist)
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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.

Ankur Singhal

Ankur Singhal (Expert)
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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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