Interest on arbitration award deemed capital, not taxable as revenue. The High Court of Orissa held that interest received by an assessee in relation to an arbitration award is of capital nature and not taxable as a revenue ...
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Interest on arbitration award deemed capital, not taxable as revenue.
The High Court of Orissa held that interest received by an assessee in relation to an arbitration award is of capital nature and not taxable as a revenue receipt. The judgment favored the assessee, following the precedent set in Govinda Choudhury and Sons v. CIT [1977] 109 ITR 497. Judge D. M. Patnaik concurred with the decision, and the reference was disposed of with no costs.
The High Court of Orissa disposed of two cases with an identical dispute regarding the taxability of interest received by an assessee in relation to an arbitration award. The court held that such interest is of capital nature and not taxable as a revenue receipt, following the precedent set in Govinda Choudhury and Sons v. CIT [1977] 109 ITR 497. The judgment was in favor of the assessee and against the Revenue. The reference was accordingly disposed of with no costs. Judge D. M. Patnaik agreed with the decision.
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