ITAT Rules Compensation for Delayed Property Delivery as Capital Receipt, Not Taxable

The Income Tax Appellate Tribunal (ITAT) ruled that compensation for delayed property delivery is a capital receipt and not taxable. The case involved Atul Sharma, who received ₹5,947,940 from Jaypee Greens Greater Noida for delayed property delivery. The tribunal referenced past rulings and High Court judgments, confirming that the compensation, not related to a borrowed sum, is not taxable interest under section 2 (28A) of the Income Tax Act. The ITAT emphasized that the compensation was for the delay in handing over the property, making it a capital receipt. This ruling aligns with previous decisions where compensation for delayed possession was treated as a capital receipt, not subject to tax. The decision provides clarity on the tax treatment of such compensations, ensuring that taxpayers receiving similar payments for delayed property delivery are not taxed on these amounts.