CAPITAL ADVANCE RECOVERY

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MANAGER TAX & FINANCE
21 Points Posted on 10 April 2021
A person has given advance of Rs 20 Lakhs in year 2010 against purchase of immovable property but due to some reasons, sale deed were not executed. The party filed the recovery suit. Now court order with in favor to buyer. Consequently he will be receiving Rs 50 lakhs. Whether excess recovery of Rs 30 Lakhs (50 Lakhs minus 20 Lakhs) will be taxable ? or Will be consider as capital receipt not taxable income. Request to pls also share some case laws.
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On 10 April 2021 at 12:15 Report
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Quick Summary
A buyer paid a Rs 20 lakh advance for property in 2010, but the sale didn't complete. After a court battle, the buyer is set to receive Rs 50 lakhs back. The key question is whether the excess Rs 30 lakhs received is taxable income or a non-taxable capital receipt. This discussion explores the tax implications and seeks relevant case law.

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Chartered Accountant
24588 Points Posted on 10 April 2021
Yes the amount is taxable
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On 10 April 2021 at 12:47
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2742 Points Posted on 11 April 2021
Yes taxable
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On 11 April 2021 at 21:41

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