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2004 (3) TMI 37 - HC - Income TaxCapital / revenue receipt - sum received by the assessee was in consideration of the premature termination of the selling agency and also of the restrictive covenants - Tribunal has rightly not accepted the plea that as the agencies continued only for a limited period on ad hoc basis, the assessee ceased to have any right to compensation on termination. As rightly held by the Tribunal, the parties viewed it as a case of premature termination of selling agency for which the assessee was required to be compensated. The Tribunal fixed 20% of the total compensation amount as attributable to the restrictive covenant and obligations, taking note of the fact that the restrictive covenants were in force for a short period of two years - Tribunal is right in its finding that only a part of sum is a capital receipt and not liable to tax as income under section 28(ii)(c) – assessee’s appeals are dismissed.
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