JUDGMENT

S. Ravindra Bhat, J.(Open Court)--Revenue's appeals in these two cases question an order of the ITAT. The issue concerns the treatment of damages and compensation awarded to the assessee. The Assessment Officer (AO) rejected the assessee's claim that these were towards capital receipts and ruled that they have fallen in the revenue stream. The CIT(A) rejected the assessee's appeal.

2. The facts are that the assessee engages itself in the business of real estate and had entered into a consortium agreement with its associates which defines the role, rights and responsibilities. This consortium entered into an agreement to sell with one JMA Buildcom Private Limited for purchase of 10 acres of land for a consideration of Rs.15 crores. The seller JMA Buildcom defaulted in its commitment within the prescribed and extended time limit. Ultimately, upon parties resorting to the Dispute Settlement Arbitration; a settlement was arrived at and an award was made based upon the parties' eventual settlement. The amount received by the assessee as a part of its entitlement (as consortium) was credited in its books of accounts as a capital stream. The AO and the CIT(A) held that the amou