AB & Co. received ₹2,00,000 as compensation from CD & Co. for premature termination of contract of agency. Amount so received is —

CS Executive · Tax Laws and Practice · PYQS · December 2014
AB & Co. received ₹2,00,000 as compensation from CD & Co. for premature termination of contract of agency. Amount so received is —
(A) Capital receipt and taxable
(B) Capital receipt and not taxable
(C) Revenue receipt and taxable
(D) Revenue receipt and not taxable.

Answer & Explanation:

Correct Answer: Option (A)

Correct answer: (A) Capital receipt and taxable. This answer applies to the historical law and assessment-year context of this December 2014 paper; later amendments may differ.

Topics: Income Tax Act, 1961

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic