The Supreme Court of India has determined that the liquidated damages received by the taxpayer from the supplier due to a delay in the delivery of a plant should be classified as a capital receipt rather than a revenue receipt. The court noted that the amount received by the taxpayer was not part of their regular business activities and directly related to a capital asset. Additionally, the court agreed with the High Court’s view that the payment was intended to compensate the taxpayer for the cancellation of the contract, which did not impact the overall structure of their business. As a result, the court dismissed the appeal in favor of the taxpayer.