Can amount of interest receipt on mesne profits considered as income under the Income Tax Act?

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Last updated: 19 April 2021
Quick Summary
This case examines whether interest received on 'mesne profits' constitutes taxable income under the Income Tax Act. Mesne profits are essentially damages awarded for wrongful possession of property. The Kerala High Court ruled that since mesne profits are considered a capital receipt (compensation for loss of property), the interest awarded on these profits is also an integral part of that compensation and therefore not a revenue receipt taxable under the Income Tax Act.

Court :
Kerala High court

Brief :
At the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following question of law for the decision of this court in the above referred cases :

Citation :
Equivalent citations: 1991 191 ITR 551 Ker

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1 Year PLAN
1999
(Excl. of GST ₹359)

2 Years PLAN
3499
(Excl. of GST ₹629)

BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)

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