https://www.taxtmi.com/caselaws?id=417019 Compensation received on cancellation of an agreement for acquisition of property rights is analysed by distinguishing a mere right to sue from a right to seek conveyance of property. If the payment is for surrender of a mere right to sue, it is not a capital asset; if it reflects relinquishment of property rights, capital gains consequences may arise. The commentary also notes that the record did not support treatment of the receipt as business income, and that taxability, if any, must be confined to the amount actually received rather than a notional figure in the relinquishment deed. The colourable device allegation cannot justify taxing a sum higher than the real receipt. en-us Mon, 10 Jan 2022 00:00:00 +0530 Thu, 13 Jan 2022 09:00:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=417019 Compensation received on cancellation of an agreement for acquisition of property rights is analysed by distinguishing a mere right to sue from a right to seek conveyance of property. If the payment is for surrender of a mere right to sue, it is not a capital asset; if it reflects relinquishment of property rights, capital gains consequences may arise. The commentary also notes that the record did not support treatment of the receipt as business income, and that taxability, if any, must be confined to the amount actually received rather than a notional figure in the relinquishment deed. The colourable device allegation cannot justify taxing a sum higher than the real receipt. Case-Laws Income Tax Mon, 10 Jan 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=417019