Compensation received

[GOPAL HARLALKA]

An assessee has filed case under Negotiable Act against Mr 'A'

Court passed order in favour of the assessee and directed Mr 'A' to pay compensation to the assesseee.

My query is compensation is capital receipt or revenue receipt. Is it taxable income

CA Gopal Harlalka

AI Summary

Court Orders Compensation Under Negotiable Instruments Act: Is It Taxable Income or Capital Receipt? An individual filed a case under the Negotiable Instruments Act against another party, resulting in a court order requiring the latter to pay compensation. The query seeks to determine whether the compensation received is considered a capital receipt or a revenue receipt for tax purposes, and if it constitutes taxable income.