Dismissing the appeal of the revenue the Court held that , compensation received under Arbitration Award is held to be capital receipt. The purpose of the ultimate use of the assessee’s land when acquired was rendered irrelevant on account of the seller defaulting in its commitment. This rendered the amount expanded by the assessee immobile. The eventual receipt of the amounts determined as compensation or damages, therefore, fell into the capital stream.
CIT v. Aeren R Infrastructure Ltd. (2018) 404 ITR 318 (Delhi) (HC)
S. 4 : Charge of income-tax -Capital or revenue —Business of real estate -Compensation received under Arbitration Award is held to be capital receipt .