TaxTMI 
TaxTMI 
2005 (12) TMI 227
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....was then one of the largest telecom companies in the world and leader in CDMA technology. In all, sixteen different project agreements were entered into by the assessee company with Qualcomm for the purpose of setting up a broad-band network on the convergence platform in the Rajasthan telecom circle and as per the said agreements, Qualcomm was to supply equipments, provide related services and also to undertake financial commitments and guarantees on behalf of the company's project in favour of Department of Telecommunications and banks. As per the license granted by DoT to the assessee-company for providing basic telephony services in Rajasthan telecom circle, it had to set up a state of art broad-band network on convergence platform in Rajasthan telecom circle within twelve months from the date of the license agreement. In terms of the aforesaid agreements, Qualcomm sent some of the equipments to the assessee-company which failed to get necessary clearance from the Customs. In addition, there was a restructuring of Qualcomm's telecom business worldwide as a result of which it had agreed to sell its CDMA business worldwide to M/s. Ericsson. Consequently, Qualcomm could no....
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....mm Inc., USA as it was optimistic of getting the licence. The assessee-company had signed the licence agreement with the Department of Telecom (DoT) on the 4-3-1998 for providing basic telephony services in the Rajasthan Telecom Circle w.e.f. 1-8-1999. The company migrated from the fixed licence fee to revenue sharing arrangement under the Telecom Policy, 1999, under which the period of licence has also been extended from 15 to 20 years. The company had planned to set up a state of art broad-band network on the convergence platform in the Rajasthan Telecom Circle, in order to provide voice telephony services alongwith other enhanced services like Phoneplus, Voice Mail, ISDN lines, leased lines, Virtual Private Network Centre, Internet Access and Cable TV services. In order to meet the above requirements as mentioned above, the company had, in 1996, tied up with M/s. Qualcomm Inc., USA and its subsidiaries which is one of the largest telecom companies of the World & pioneer in CDMA technology. The company accordingly entered into contracts with Qualcomm for supply and related services for CDMA based wirelines equipments. In terms of the above said contract....
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....Officer for his examination. He, therefore, came to a conclusion that the claim of the assessee on account of capital receipt was accepted by the Assessing Officer without examining the terms and conditions of the said agreements and thus, the question of taxability of the said amount was examined in a rather perfunctory manner. According to him, the assessment thus was framed by the Assessing Officer without proper enquiry and without application of mind and the same was erroneous as well as prejudicial to the interest of the Revenue. He, therefore, assumed jurisdiction under section 263 and issued a notice under section 263 to the assessee which read as follows:- "Sub: Show-Cause Notice under section 263 of the Income-tax Act, 1961 - Assessment year 2000-01 - A perusal of the record of assessment proceedings for assessment year 2000-01 in your case shows that you credited an amount of Rs. 63.92 crores in capital reserve account following your settlement with Qualcomm and its subsidiaries and affiliates. 2. The Assessing Officer accepted this receipt as a capital receipt without proper enquiry. Neither copies of the original contracts with Qualcomm and i....
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....pporting documentary evidence and as such, there was no error in the assessment order passed by the Assessing Officer much less an error causing prejudice to the interest of the Revenue warranting interference under section 263. Reliance was placed on behalf of the assessee-company, inter alia, on the decisions of Hon'ble Madras High Court in the case of CIT v. Sakthi Charities [2000] 244 ITR 231 and that of Hon'ble Bombay High Court in the case of CIT v. Gabriel India Ltd. [1993] 203 ITR 108. On merits, it was submitted on behalf of the assessee-company that the amount of Rs. 63.92 crores was remitted by Qualcomm to it on capital account and since no business had commenced by it even in the year under consideration, the said amount was in the nature of capital receipt not liable for taxation. 7. The aforesaid submissions made on behalf of the assessee-company, however, did not find favour with the learned CIT. He required the assessee-company to file a copy of settlement agreement dated 9-10-1999 entered into by it with Qualcomm and after discussing the relevant terms and conditions of the said agreement in his impugned order, he observed that the cancellation of projec....
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....on of the learned CIT on merits directing the Assessing Officer to tax the amount of Rs. 63.92 crores in its hands as "income from other sources" holding the same to be a revenue receipt. 10. As regards the issue raised in ground Nos. 2 to 7, the learned counsel for the assessee Shri Salil Aggarwal submitted that for valid assumption of jurisdiction under section 263, two conditions are required to be satisfied i.e. the assessment order must be erroneous and the same should also be prejudicial to the interest of the Revenue. Relying on the decision of Hon'ble Madras High Court in the case of Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 and that of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, he contended that both these conditions are cumulative and if either of the two does not exist or is found to be not satisfied, the learned CIT cannot initiate proceedings under section 263 to set aside the assessment order passed by the Assessing Officer. He submitted that the documentary evidence running into more than thousand pages was produced on behalf of the assessee-company before the Assessing Officer in the present case alo....
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....eous order prejudicial to the interest of the Revenue by the CIT unless he is able to establish that the view taken by the Assessing Officer is unsustainable in law. In this regard, he invited our attention to a q copy of order passed under section 263 by another CIT placed at page Nos. 43 to 51 of his paper book and pointed out that in the said order passed in the case of M/s. Shyam Basic Infrastructure Projects (P.) Ltd., the similar amount received by the assessee from Qualcomm as compensation as per the same settlement agreement was held to be a "capital receipt" not chargeable to tax by the learned CIT, Central-III, New Delhi and the proceedings under section 263 were dropped by him. He contended that this decision of learned CIT taken in the case of M/s. Shyam Basic Infrastructure Projects (P.) Ltd. clearly shows that the view taken by the Assessing Officer in treating the similar amount as "capital receipt" was a possible view and the learned CIT was not justified in substituting the same with his own view by assuming jurisdiction under section 263 since the same was not permissible in law. 12. As regards ground Nos. 8 to 13 challenging the impugned addition on merits, Sh....
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....egards the remaining sum of Rs. 0.41 crores paid by Qualcomm as per the settlement agreement, he submitted that the said amount was paid merely towards reimbursement of demurrage expenses incurred by the assessee-company and the same, therefore, did not constitute any income in its hands. 13. Shri Aggarwal further submitted that the learned CIT, however, treated the entire amount of Rs. 63.92 crores received by the assessee from Qualcomm as a revenue receipt chargeable to tax without appreciating the correct nature of the said receipts as well as without fully discharging the onus lay on the department to prove that the said receipt was falling within the taxing provisions. He submitted that the observation of the learned CIT in this regard that the cancellation of agreement is a normal incidence of business was totally misconceived firstly because the project agreements entered by the assessee-company with Qualcomm were not trading agreements but were agreements on capital account and secondly, the business of the assessee-company had not commenced during the year under consideration. He contended that even the finding recorded by the learned CIT that there was no loss of any p....
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....re-construction period which is inextricably linked with the process of setting up of its plant and machinery, such receipt would go to reduce the cost of the project and the same would not constitute income of the assessee liable to tax. Reliance was also placed by him on the decision of Hon'ble Punjab & Haryana High Court in the case of Karnal Co-operative Sugar Mills Ltd. v. CIT [1998] 233 ITR 531 wherein it was held that interest income being directly relatable to the terms of the contract for acquiring a business asset should go to reduce the cost of the asset. He also cited the decision of Hon'ble Supreme Court in the case of CIT v. Karnataka Power Corpn. [2001] 247 ITR 268 wherein interest receipts and hire charges earned from the contractors during the construction period were held to be capital receipts which would go to reduce the capital cost of the project. He contended that the decision of learned CIT holding the amount in question as liable to tax under the head "income from other sources" thus was not sustainable. 15. Shri Aggarwal further submitted that the loan amount from ABN Amro Bank was taken by the assessee for the payment of license fees to the Dep....
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....eet entries or even in the assessment order regarding the documentary evidence running into more than one thousand pages having been produced by the assessee during the course of assessment proceedings and in the absence of any evidence brought on record by the learned counsel for the assessee showing that the same was in fact produced during the course of assessment proceedings before the Assessing Officer, the claim of the assessee on this count was not acceptable. He submitted that merely the fact that the submissions made on behalf of the assessee-company in this regard before him was not specifically disputed by the learned CIT in his impugned order does not go to establish that the documentary evidence running into more than one thousand pages was actually produced by the assessee before the Assessing Officer and the same stated to be inclusive of the relevant agreements was actually examined by the Assessing Officer. He contended that the proper enquiry thus was not made by the Assessing Officer in the present case before accepting the amount in question as "capital receipt" as claimed by the assessee and, therefore, the assessment order completed by him accepting the said c....
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....t order of the Assessing Officer has been held to be erroneous by the learned CIT holding any view taken by the Assessing Officer as erroneous and therefore, the contention of the learned counsel for the assessee about the learned CIT having no power to substitute his own view in place of one of the possible or permissible view taken by the Assessing Officer in the revision jurisdiction is neither relevant nor material. He also pointed out that the order passed by the another CIT i.e. CIT, Central-III in the case of other group company accepting the similar amount as "capital receipt" and dropping the proceedings under section 263 was passed subsequent to the date of passing of the impugned order and the same, therefore, cannot be said to have any bearing to decide the issue relating to validity of assumption of jurisdiction by the learned CIT under section 263 in the present case. 19. On merits, the learned CIT DR Shri Rajnish Kumar submitted that the amount in question was received by the assessee-company from Qualcomm as a result of cancellation of agreements and settlement of dispute through the process of arbitration. He contended that the project agreements originally ente....
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....ue receipt, the same has to be treated as income as per the inclusive definition given in section 2(24) and the same has to be taxed unless it is specifically exempt under one or the other provisions of the Act as held by Hon'ble Supreme Court in the case of Emil Webber v. CIT [1993] 200 ITR 483. Reliance was also placed by him on the decision of Hon'ble Supreme Court in the case of CIT v. G.R. Karthikeyan [1993] 201 ITR 866 wherein it was held that since the definition of "income" in section 2(24) is an inclusive one, its ambit should be same as that of a word "income" occurring in Entry 28 of list-I of the 7th Schedule to the Constitution. Further reliance was placed by him on the decision of Hon'ble Supreme Court in the case of CIT v. Karam Chand Thapar [1996] 222 ITR 112 wherein it was held that it cannot be laid down as a matter of law that any amount which was not initially received as a trading receipt can never become a trading receipt. He also contended that once the amount in question received by the assessee is held to be a revenue receipt chargeable to tax, the same has to be included in the total income of the assessee under one of the heads of income which....
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....essee-company is required to be decided on the basis of terms of the settlement agreement and not on the basis of any dispute which was settled through arbitration. In this regard, he pointed out that all the project agreements entered by the assessee-company with Qualcomm were admittedly on capital account and none of them being a trading agreement, cancellation of such agreement could not, in any manner, result in income to the assessee-company. He submitted that the entire amount in question received as compensation by the assessee-company was in connection with the capital structure of the company and such receipt going by the learned DR's own submissions is a capital receipt. He also submitted that all receipts are not income and the burden in this regard is on the Revenue to establish that a particular receipt constitutes income of the assessee within the meaning of section 2(24). According to him, all the case laws relied upon by the learned DR in support of the Revenue's case are distinguishable on facts and none of them is directly applicable to the facts of the present case. 22. We have considered the rival submissions in the light of material available on reco....
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....d it bid for various telecom circle licences in 1995. The company was the highest bidder for the Basic Services in Rajasthan Telecom Circle. However, due to certain differences in calculation of licence fee etc. with the Department, the licence was delayed and it was ultimately awarded only in 1998. Meanwhile the company had made preparations for installation of telecom network and tied up with M/s. Qualcomm Inc., USA as it was optimistic of getting the licence. The assessee-company had signed the licence agreement with the Department of Telecom (DoT) on the 4-3-1998 for providing basic telephony services in the Rajasthan Telecom Circle w.e.f. 1-8-1999. The company migrated from the fixed license fee to revenue sharing arrangement under the Telecom Policy, 1999, under which the period of license has also been extended from 15 to 20 years. The company had planned to set up a state of art broad-band network on the convergence platform in the Rajasthan Telecom Circle, in order to provide voice telephony services alongwith other enhanced services like Phoneplus, Voice Mail, ISDN lines, leased lines, Virtual Private Network Centre, Internet Access and Cable TV services....
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.... exact nature of the amount of Rs. 63.92 crores received by the assessee-company from Qualcomm as compensation and it was therefore incumbent upon the Assessing Officer to call for and examine at least the relevant agreement setting forth such terms. However, the record of the Assessing Officer revealed that no such agreement was actually examined by him before accepting the claim of the assessee which entailed the learned CIT to assume jurisdiction under section 263. 25. Before the learned CIT as well as before the Tribunal, the claim of the assessee is that the documentary evidence running into more than thousand pages was produced on behalf of the assessee-company before the Assessing Officer during the course of assessment proceedings which was returned back by him after verification. However, there is no iota of evidence on record to show that such documentary evidence was indeed produced before the Assessing Officer and if at all the same was produced, the agreement settling the terms of termination of contracts between the assessee-company and Qualcomm was forming part of the said evidence. On the other hand, the entry recorded by the Assessing Officer on 20-3-2003 in his....
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....esaid agreement setting forth the terms of settlement between the assessee-company and Qualcomm was very much relevant and material to examine the veracity of the assessee's claim that the amount of Rs. 63.92 crores received by it as compensation was a capital receipt not chargeable to tax, we are of the view that the failure of the Assessing Officer to examine the said evidence certainly made his order passed under section 143(3) erroneous as well as prejudicial to the interest of the Revenue as rightly held by the learned CIT. For this conclusion, we derive support from the two decisions of Hon'ble Supreme Court in the case of Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 and in the case of Ram Pyari Devi Saraogi v. CIT [1968] 67 ITR 84 wherein it was held that the CIT can regard the order of the Assessing Officer as erroneous on the ground that in the circumstances of the case, the ITO should have made further enquiries before accepting the statements made by the assessee in his return. Following these decisions of Hon'ble Supreme Court, Hon'ble Allahabad High Court has held in the case of Smt. Lajjawati Singhal v. CIT [1997] 226 ITR 527 that an assessment mad....
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.... the order of the Assessing Officer with a direction to him to make a fresh assessment after conducting such enquiry. In the present case, it was indicated by the learned CIT in the notice itself issued under section 263 that appropriate order will be passed by him in case the order of the Assessing Officer is found to be erroneous and as such, he was within his powers to make the necessary enquiries, which the Assessing Officer had failed to do, on his own and decide the issue on merits as has been done by him in the impugned order passed under section 263. As such, keeping in view all the facts of the case as well as the legal position emanating from the various judicial pronouncements discussed above, we are of the considered view that the assumption of jurisdiction by the learned CIT under section 263 was in accordance with law and there was no legal infirmity in the impugned order passed by him under section 263 as alleged on behalf of the assessee-company. We, therefore, find no merits in the contentions raised by the learned counsel for the assessee on this issue and rejecting the same, we dismiss ground Nos. 2 to 7 of this appeal. 29. As regards ground Nos. 8 to 13 relat....
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.... 114 ITR 939 in support of his contention that the Tribunal could remand the case to CIT directing him to pass a fresh order under section 263 after further investigation as section 254(1) confers powers on the Tribunal in widest possible terms. On a careful perusal of the said decision of the Hon'ble Calcutta High Court, it is observed that the facts involved in the said case were entirely different from the facts of the present case inasmuch as one of the ingredients for considering the order passed by the ITO in that case to be erroneous or not was the question whether the assessee-company was a company in which the public were not substantially interested. The point was how this question was to be resolved, by taking into consideration only the equity shareholdings or by taking into consideration both the equity and preference shareholding? This again was dependent upon the question whether Article 100 of the Articles of Association of the assessee-company would be applicable or not which was to be considered in the light of applicability of section 90 of the Companies Act, 1956 to the facts of the said case. The Additional CIT in coming to the conclusion that the order of ....
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....ine further evidence which he himself has considered to be not relevant for deciding the issue on merits. The facts involved in the present case are thus almost similar to the facts involved in the case of Maharani Kanak Kumari Sahiba. As mentioned above, the Hon'ble Calcutta High Court while deciding the case of Martin Burn Ltd. has distinguished the case of Maharani Kanak Kumari Sahiba on facts which again goes to show that the facts involved in the case of Martin Burn Ltd. were entirely different from the facts of the present case. 32. On the other hand, the decision of Hon'ble Punjab & Haryana High Court in the case of Jagadhri Electric Supply & Industrial Co. cited by the learned counsel for the assessee appears to be directly applicable to the facts of the present case. In the said case, it was held by the Hon'ble Punjab & Haryana High Court that the jurisdiction vested in CIT under section 263(1) is of a special and exclusive nature and if the Tribunal is allowed to find out the grounds available to the CIT to pass an order under section 263, then it will amount to sharing of such exclusive jurisdiction vested in the CIT which is not warranted under the Act. I....
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....ibunal can neither substitute the same nor allow the learned CIT to substitute the same especially when the substituted ground was available before the learned CIT but was not considered by him. We, therefore, hold that the contention raised by the learned CIT-DR on this issue seeking remand of the matter to the learned CIT is not sustainable either in law or on facts and rejecting the same, we now proceed to decide the issue relating to the nature of amount in question as well as taxability of the same on merits on the grounds/basis given/adopted by the learned CIT in his impugned order under section 263. 34. It is observed that out of the total amount of Rs. 63.92 crores, a sum of Rs. 0.41 crores was paid by Qualcomm to the assessee-company for payment of demurrage on the equipments imported from them. In this regard, the learned counsel for the assessee has submitted before us that this amount was received on account of reimbursement of actual expenses incurred by the assessee-company on demurrage and there being nothing on record to dispute or controvert this factual position, we have no hesitation to hold that the said amount could not be treated as income of the assessee b....
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.... Amended and Restated Equipment Finance Agreement (Short Term Deferred Credit Facility), (viii) Amended and Restated Equipment Finance Agreement, (ix) Amended and Restated Agreement to Provide Letter of Credit, (x) Amended and Restated Joint and Several Corporate Guarantee, (xi) Amended and Restated Long Term Loan Agreement, (xii) Amended and Restated Pledge Agreement, (xiii) Amended and Restated Support Agreement, (xiv) Amended and Restated Charge Agreement, (xv) Consulting Agreement, and (xvi) Agreement to Provide Loan Guarantee in Form of Letter of Credit; and Whereas, disputes have arisen between the parties concerning whether Qualcomm and Shyam have performed or breached various of their respective obligations under the Project Agreements and otherwise; and Whereas, the parties wish to enter into this Settlement Agreement in order to make a legally binding resolution of all their disputes and all their obligations to one another. Now, therefore, each of the parties jointly and severally agrees as follows." 36. As is evident from the aforesaid portion of the settlement agreement, Qualcomm was to supply the assessee-company with a wireless local loo....
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.... all other items provided with the equipment. Qualcomm representatives will accept delivery of all items at Shyam's facilities and will dismantle, pack and ship them at Qualcomm's sole expense during the period November 1 through 31-12-1999. Shyam will provide free storage through 31-12-1999, and provide all reasonable cooperation to facilitate Qualcomm's operations. Until Qualcomm representatives receive delivery of such items, Shyam shall be responsible for all risk of loss and shall take all reasonable precautions for their care and protection. The parties agree that Qualcomm shall be entitled to receive the full amount of any refund or return, if any, of the customs duties that were paid upon the importation of the equipment and other items into India. Shyam will fully cooperate with Qualcomm in taking all steps reasonably necessary to apply for the receive such refund or return of customs duties, including any assignments of rights thereto in favour of QIPL. B. Qualcomm paid ABN-AMRO US Dollars 6,982.871 (INR 301,901,075) through a draw on the latter of credit securing the ABN-AMRO "Loan Facility" referenced in the Agreement to Provide Loan Guarantee in Fo....
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....2001 Guarantees shall remain in place with the terms of this Settlement Agreement superseding the obligations of the parties to one another under the Amended and Restated Joint and Several Corporate Guarantee and the Amended and Restated Deed of Contribution. A. QUALCOMM hereby releases Shyam from any obligation to pay approximately $1.2 million in letter of credit fees owed to QUALCOMM in connection with the Guarantees. B. Shyam undertakes to ensure using its best efforts that the 2/2000 and 2/2001 Guarantees are returned or expire by their terms without having been called, with the consequence that QUALCOMM would have no liability to make any payments thereunder. C. Upon the cancellation or expiration of the 2/2000 Guarantee without having been called, or on other terms with the consequence that QUALCOMM would have no liability to make any payment thereunder, QUALCOMM will pay Shyam INR 166,666,667. If despite Shyam's different diligent best efforts the 2/2000 Guarantee is called, Shyam shall immediately deliver to QUALCOMM a promissory note in the form of Appendix 2 hereto payable in US dollars equivalent to INR 83,333,333 at the exchange rate list....
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....Qualcomm to discharge the liability on account of project loan availed by the assessee-company from ABN Amro Bank amounting to Rs. 30.19 crores in order to get itself released from the guarantee given by it to ABN Amro Bank. In short, the loan taken by the assessee-company from ABN Amro Bank for which guarantee was given by Qualcomm stood waived and Qualcomm discharged the said liability in terms of the settlement agreement. In the case of CIT v. Ganesa Chettiar [1982] 133 ITR 103, Hon'ble Madras High Court has held that a debt forgiven or waived cannot he treated as "income". In the case of CIT v. Phool Chand Jiwan Ram [1981] 131 ITR 372 (Delhi) the amount payable c by the assessee to J.D. had arisen because the said party had paid a sum of Rs. 1,80,000 to the Bombay firm on the assessee's account and considering that vis-a-vis the assessee and the J.D. the said amount was not a payment made for the purchase of stock-in-trade but it was a credit in respect of an amount borrowed by the assessee from J.D. in order to discharge its liability to the Bombay firm, Hon'ble Delhi High Court held that the same could not be described as a liability on trading account. In the cas....
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....different inasmuch as the assessee in that case was carrying on the business of production and supply of limestone and during the course of his business, he had entered into an agreement for supply of limestone and dolomite to the Bengal Iron Co. Ltd. Due to the rates of the said supply having become uneconomical, the said agreement was terminated and the amount received as compensation for such termination was held to be a revenue receipt assessable to tax as "business income" by the Hon'ble Supreme Court. While rendering this decision, Hon'ble Supreme Court held that when a question arises whether payment of compensation for termination of an agency is a capital or a revenue asset, it would have to be considered whether the agency was in the nature of capital asset in the hands of the assessee or whether it was only part of his stock-in-trade. In the said case before the Hon'ble Supreme Court, the agency was only for stock-in-trade and, therefore, the compensation for termination thereof was held to be a revenue receipt assessable to tax. In the present case, the project agreements entered into between the assessee-company and Qualcomm being on capital account, the ag....
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....must exist between the quality of the receipt and its source. In the present case, the amount was received by the assessee for loss of capital asset and not certainly to compensate itself for the loss of any profits of business. As a matter of fact, the business of the assessee-company was not commenced in the year under consideration and as such, there was no source of income to which the receipt on account of compensation could have been connected. The loss of the project agreements must, therefore, be regarded as falling on the capital asset of the affected person i.e., the assessee-company in the present case and not in the course of his ordinary trading as held by Hon'ble Supreme Court in the case of P.H. Divecha. 44. As rightly submitted by the learned DR before us, the case of Barium Chemicals Ltd. decided by the Hon'ble Andhra Pradesh High Court is a leading case on the issue under consideration. In the said case, the assessee had entered into an agreement with an English company whereunder the said company was required to erect a barium chemical plant for the assessee. The English company, however, could not complete its work fully and even whatever plant and ma....
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....h company. There has been a sterilization of capital assets of the assessee in that the English company failed to erect the machinery and plant according to the original stipulations. It had abandoned the work in the middle. The optimum capacity of the machinery installed was not even 30 per cent of the installed capacity. The amount paid was towards damages in order to compensate the assessee for not fulfilling the terms of the contract. The sterilization of assets need not be in toto in order to make a payment a capital receipt (vide Vazir Sultan & Sons; Godrej & Company and Karam Chand Thapar. The plant and machinery could not by any stretch of reasoning be construed as stock-in-trade of the assessee. They are only capital assets. The agreements between the assessee and the English company were not trading contracts for generation of revenue profits, but they were only designed to bring into being an apparatus for an income-yielding source. 58. Having regard to all these circumstances, the only conclusion we reach on this aspect is that the sum of Rs. 47,20,939 received by the assessee during the assessment year 1968-69 from M/s. Mitchell Limited constitutes in its enti....
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....s inflicted on the capital asset of the company thereby resulting in loss of source of assessee's income. In the present case also, the assessee had released/discharged Qualcomm from the project agreements thereby giving up its right to purchase/acquire the equipment/services from the said party and this act had certainly inflicted an injury to the capital structure of the assessee-company resulting in a loss of source of income. The amount in question received as compensation for such injury thus was a capital receipt as held by Hon'ble Supreme Court in the case of Oberoi Hotel (P.) Ltd. 47. Before us, one of the contentions raised by the learned DR is that there was no loss to its capital structure suffered permanently by the assessee-company since it entered into a fresh agreement with M/s. Lucents Technology and continued to set up the broad-band network for the purpose of carrying out its business of pro viding basic telecom services. Reliance in this regard is placed by him on the decision of Hon'ble Supreme Court in the case of Karam Chand Thapar wherein it was held that amounts which were not received initially as trading receipts could eventually be regarded....