K S KRISHNAMURTHY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE questions referred to us at the instance of the assessee. arise out of the assessment made the assessee for the assess ment years 1977-78. and 1978-79 :

(2.) THE Tribunal has in the course of the order found that the payments were made to the assessee for the work done and not by way of damages. THE interest awarded has been found by the Tribunal was for the period of delay in the receipt of the contract amounts. In view of these findings of fact, the character of those receipts is clearly revenue receipts and not receipts of capital nature. Counsel for the assessee submitted that the amounts paid were paid pursuant to the award made in an arbitration proceedings and that the amount awarded was on the ground that the contractor/asscssee has become entitled to damages by reason of breach of contract committed by the other party to the contract. THE Tribunal, however, after considering the arbitration award and in the claim made by the assessee for the amounts awarded were for work done and as interest on delayed payments that the amount of Rs. 7,66,292 was found to have been paid for the work done by the assessee and the sum of Rs. 2,67,170 was paid by way of interest on the amount due to the assessee/contractor and the payment of which amount had been delayed. In view of the findings of fact recorded by the Tribunal that the payments were made for the work done and as interest for delay in paying the amount to the contractor, the receipts must be held to be revenue in character.