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2012 (12) TMI 168 - HC - Income TaxIncome earned from non-Compete Agreement - nature of receipt of commission in addition to salary - Income from salary vs Income from business - Contract of Service or Contract for Service - Agreement was entered into in dual capacity - salary in capacity as an employee of UC and non-compete fees for not taking away business of the firm - held that:- The mere fact that two agreements existed does not necessarily imply that the payment made under one agreement is not to be regarded as part of salary, when undisputably all the work done under the agreement was performed by the employee for the benefit of the employer. The fact that the employer utilised the same employee to perform different types of work under two separate agreements does not give to such payments a character other than that of "salary", having regard to the wide definition of the term in Section 17(1) of the Act - Contract is Contract of Service where Employer - Employee relationship exist - assessee, in this case, also continued his employment with the firm, and was given commission for doing what he was normally expected to do, i.e. work for the said firm in his area of expertise. He was given salary for that; in addition, he was also given commission for not competing with his employer, during his employment, in regard to the same line of business, in which he worked as an employee of the firm. Therefore, the commission amount clearly was part of salary answering the description under the inclusive definition u/s 17 of the Act - question of law is answered in favour of the revenue, and against the assessee.
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