July 2025
Income — Interest — Capital or revenue receipt — Precedents — Purchase of property in auction paying full consideration — Auction subsequently nullified by Court order — Interest received on amount by direction of Court not compensation — Amount Bonafide receipt by Assessee as successful auction bidder and not as compensation from order of Court — Held, interest receipt capital in nature and not assessable as income from other sources:
19 Pr. CIT vs. INS Finance and Investment Pvt. Ltd.:
[2025] 475 ITR 83 (Del):
A. Y. 2011-12: Date of order 30 May 2024:
S. 56(2)(viii) of ITA 1961:
Income — Interest — Capital or revenue receipt — Precedents — Purchase of property in auction paying full consideration — Auction subsequently nullified by Court order — Interest received on amount by direction of Court not compensation — Amount Bonafide receipt by Assessee as successful auction bidder and not as compensation from order of Court — Held, interest receipt capital in nature and not assessable as income from other sources:
The Assessee had acquired a right to purchase a property through an auction carried out by Punjab National Bank (PNB) and thereafter paid the entire purchase price. However, subsequently, the auction came to be annulled and the Punjab and Haryana High Court, vide order dated 21 September 2010 directed for refund of the whole amount deposited by the Assessee along with interest accrued thereon.
The Assessee added an amount of ₹3,19,07,676 to the Capital Reserve in the Balance Sheet. The Assessee also claimed TDS credit of ₹54,41,122. In the scrutiny assessment for AY 2011-12, the As
