Assessee, engaged in mining and power generation, purchased wind turbine generators (WTGs) from Suzlon Energy Limited (SEL) under contracts that included a performance guarantee clause. The WTGs failed to meet the guaranteed generation levels, and SEL compensated the assessee for the shortfall. Assessee claimed this compensation as a capital receipt, arguing it was for the impairment of a capital asset. AO, however, treated it as a revenue receipt pleading that the same compensated for lost power generation (business income). On appeal the Tribunal held that the WTGs’ under-performance impaired the capital asset’s utility, making the compensation akin to damages for sterilization of a capital asset. Accordingly, the compensation was a capital receipt, not chargeable to tax.(AY. 2008 -09 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 4 : Charge of income-tax – Capital or revenue – Compensation received for under performance of wind turbine generators (WTGs)- Capital receipt. [S.28(i)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-57221","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-eSV","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=57221"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57221\/revisions"}],"predecessor-version":[{"id":57222,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/57221\/revisions\/57222"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=57221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=57221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=57221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}