wheather compensation receipt is treated as revenue receipts

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This query is : Resolved

CA Sanat Pyne (Querist)

11 October 2008 one of my client had made a joint venture contract with a foreign party and sent Rs.4 crore but at last contract got cancelled and my client claimed compensation in addition to the contract.foreign party remitted Rs.5 crore (including contract price).can any one answar wheather Rs.1 crore is treated as revenue receipts or capital receipts.give some appropriate case law.

CMA Jitendra Singh

CMA Jitendra Singh (Expert)

11 October 2008 It is revenue receipt lot of case laws support this view.After searching ,most suitable case law ,i will forward you

CA. Gurdeep Singh Chawla

CA. Gurdeep Singh Chawla (Expert)

11 October 2008 Revenue receipt.

Ravikumar.G

Ravikumar.G (Expert)

11 October 2008 Sec 28 (ii)
Compensation taxable as business Income:
Compensation or other payment for
1) Termination or modification of Managing agent's agreement in relation to an Indian Co.
2) Termination or modification of Managing agent's agreement in relation to any other Co., in India.
3) Termination or modification of contract relating to an agency in India.
4) Vesting of management of property or business with Govt/Corporation.

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