Recovery of investment through court

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Dear sir I invested Rs 2.10 lacs in 1995 in a firm which turned out to be bad deal besides chaeting FIR . A civil recovery suit was filed and after long legal battle , in 2017 i.e. after 22 years a out of court settlement was done for Rs 5 lacs.This receipt is recorded in case closure order of trial court. Mean while I spent almost 1 lac rs on litigation expenses in several cases high court appeals etc upto high court ,travel and other expenses. Forget interest recovery for the period Ofcourse I can deduct original amount form 5 lacs and show as icome this current FY. But i lost 1 lac in expenses and also interest on investment for 22 years and even indexing /inflation cost How this amount should be terated to minimise tax in this year income.Have I to pay any tax at all?

In such cases, the facts given in the court order would be very relevant. In your query, the facts are not clear. For example, you have stated that you "invested in a firm". It is not clear what this means. A "firm" could mean a partnership firm or it could mean a proprietary firm. You have not clarified what kind of entity you have invested in. Secondly, it is also not clear as to what kind of investment this was. It could be a loan or it could be capital in a partnership firm in which you became a partner. In the alternative, if the "firm" is actually a private limited company then your investment could also be in the form of shares of that company. Thirdly, it would also be relevant to understand what the court has ordered. In what form has the "firm" got to pay you - whether by way of compensation or penalty or interest.

The reply about taxability would depend completely on the facts. Since your facts are not clear, it is not possible to respond to your questions.

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