The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the award is taxable as “income from other sources” under the provisions of the Income Tax Act, 1961.
The assessee, an individual, filed the income tax returns for the relevant assessment year. The assessing officer, based on the information received, initiated the assessment proceedings and concluded the same by holding that the assessee has been awarded an amount of Rs.28 crores as settlement through an arbitration award and the same shall be treated as business income of the assessee.
The assessee filed an appeal against the order where the first appellate authority reversed the order. The Revenue filed an appeal against the order challenging the same.
The Tribunal bench comprising Accountant Member Rajesh Kumar and Judicial Member Saktjith Dey observed that while deciding assessee’s appeal in an earlier case, the Tribunal has upheld the decision of learned Commissioner (Appeals) that the arbitration award is taxable as “Income from other sources” under section 56(1) of the Act.
“The issue is squarely covered insofar as the present appeal is concerned and nothing survives to be decided. Therefore, respectfully following the decision of the co-ordinate bench (supra), we uphold the decision of learned Commissioner (Appeals) by dismissing the ground raised,” the Tribunal said.
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