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2011 (10) TMI 90 - ITAT MUMBAITaxability of receipt u/s 28(va) - a sum of ₹ 2 crores received by the Assessee pursuant to agreement which the sellers sold their shareholding to the acquirer and further the sellers undertook not to engage directly or indirectly in any business which competes with that of the Assessee for a period of 11 years. - Held that:- For proviso(i) to Sec.28(va)(a) to apply there must be transfer of the right to carry on any business. The Assessee in the present case was not carrying on any business on his own but was the promoter and director of the company whose shares were purchased by the Acquirer. - Payments on account of non-compete fees cannot be brought to tax u/s.45 of the Act. - in the present case the proviso(i) to Sec.28(va)(a) of the Act will not apply. The provisions of Sec.28(va)(a) would apply and consequently the receipt in question would be chargeable to tax as business income and not under the head capital gain. - Decided against the assessee.
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