https://www.taxtmi.com/caselaws?id=794909 Tax treatment of surplus from transferring rights after termination of a Joint Development Agreement depends on the transaction's cumulative commercial realities and legal effect. Prolonged blockage, sterilisation, or restoration of rights does not automatically create a non-taxable capital receipt; where the surplus arises from voluntary transfer of a consolidated and marketable bundle of rights, it remains taxable. The transaction may nevertheless fall under the Capital Gains regime rather than business income when the transferred rights emerged after involuntary sterilisation, termination, and acquisition of reversionary rights. Because section 40(a)(ia) operates only in computing business income, its disallowance basis falls away under capital-gains treatment. Encroachment-related provisions require verification of crystallisation and supporting evidence. en-us Wed, 01 Jul 2026 00:00:00 +0530 Tue, 14 Jul 2026 08:26:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=794909 Tax treatment of surplus from transferring rights after termination of a Joint Development Agreement depends on the transaction's cumulative commercial realities and legal effect. Prolonged blockage, sterilisation, or restoration of rights does not automatically create a non-taxable capital receipt; where the surplus arises from voluntary transfer of a consolidated and marketable bundle of rights, it remains taxable. The transaction may nevertheless fall under the Capital Gains regime rather than business income when the transferred rights emerged after involuntary sterilisation, termination, and acquisition of reversionary rights. Because section 40(a)(ia) operates only in computing business income, its disallowance basis falls away under capital-gains treatment. Encroachment-related provisions require verification of crystallisation and supporting evidence. Case-Laws Income Tax Wed, 01 Jul 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=794909