TaxTMI 
TaxTMI 
2022 (5) TMI 216
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....nfirming the treatment of the damages received of Rs.4,88,19,661/- as a revenue receipt instead of it being a capital receipt. This is against the fact that the order of the National Consumer Redressal Forum (NCDM) has clearly held that the damages were for deficiency of service as stated in the learned CIT (A)'s order in para 2.4.1 itself. 2. The learned Commissioner of Income tax (A) has erred in fact in not appreciating that the NCDM as confirmed by the Honorable Supreme Court that the payment to be made to the assessee are in the nature of damages, which damages are for purely for deficiency of service and that merely the method for calculating the damages is to adopt a notional interest for the period of default and delay by the....
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....e date of payment. 3. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 4. The ld. A.R submitted that on 05.12.1988 a fire accident took place at company's factory premises causing heavy damage to building, plant and machinery, stock etc. and claim for loss was made with the United India Insurance Company Ltd. In December, 1996, the insurance company repudiated the claim. In 1997, the assessee filed petition before the National Consumer Disputes Redressal Commission. On 10.03.2006, the National Consumer Disputes Redressal Commission passed an order in directed the United India Insurance Company to pay a sum of Rs.2,83,39,608/- with interest @ 10% per annum....
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....sing officer as well as the CIT(A) has rightly held that these are the revenue receipts as the interest was not part of the compensation. The ld. D.R submitted that the Hon'ble Supreme Court in the case of Ghaziabad Development Authority Vs. Dr. N.K. Gupta (2002) IND Law BCDRC 189. The assessee has rightly treated these receipts of damages of Rs.4,88,19,661/- as revenue receipts and accordingly liable to tax and therefore, properly treated the total income of the assessee. The ld . D.R submitted that assessee in the present case has declared the said amount as capital loss and therefore in this particular year offered the same to the tax. Therefore, the treatment given by the assessee itself shows that it is a revenue receipt hence appeal o....