New Delhi, Oct. 20 -- A person who receives money after giving up rights to a disputed property may have to pay tax on the receipt. But how that money is classified can make a significant difference to the tax calculation.

In a ruling dated 14 September 2026, the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that Rs.1.5 crore received by a taxpayer for assigning his contractual and court-decree rights over land should be treated as capital gains, not income from other sources. The decision overturned a tax addition of Rs.1.45 crore under the latter category, but did not make the receipt tax-free.

The ruling in Hanumanprasad Lalchand Gupta vs Deputy Commissioner of Income Tax, ITA No. 1514/Ahd/2025, highlights why the ...