#Contractual Compensation

Delhi High Court rules that arbitrators lack jurisdiction to award interest or compensation on claims explicitly withdrawn by parties, even if framed as indirect relief. The decision reinforces the finality of claim withdrawal under arbitration agreements, impacting commercial dispute resolution strategies.

ITAT Pune rules that Rs. 7.84 crore paid as compensation for cancelled share sale agreements qualifies as a deductible business expense under Section 48 of the Income Tax Act, provided the recipients have paid tax on the amount. The ruling clarifies that contractual compensation, even for failed transactions, is not a colourable device if properly taxed, offering relief to taxpayers in similar disputes.