Compensation received from landlord for delay in actual delivery of leased premises is not taxable as revenue receipt.

On facts compensation of Rs.1,69,71,000 received from landlord, which was in effect refund of rent paid for the period for which property was not ready for start of STP unit. Rent received back by way of compensation is to be credited against the rent paid by the assessee. Thus, refund of the rent of pre operative period was credited to pre operative expenses account and the refund of the rent of post operative period was credited to rent account which was transferred to P & L A/c nature of entire compensation is the same. Merely because the assessee has bifurcated it into two portions, different treatment cannot be given to them. Therefore, no portion of the compensation amount is taxable as revenue receipt. (A.Y. 2003 – 2004)
American Express (India) (P) Ltd. v. JCIT (2012) 79 DTR 127/150 TTJ 316 (Delhi)(Trib.)