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2012 (3) TMI 209 - AT - Income TaxCapital receipt versus revenue receipt - Whether the receipt from transfer of trade marks, copyrights and designs received is to be chargeable to capital gains tax? - Held that:- (i) Right to manufacture, produce or processing of biscuits is a different right from trade mark, brand name and designs. - (ii) One cannot presume otherwise, when the Legislature itself has, in clear terms, mentioned its intention in the Act and the Memorandum explaining the provisions of the Act. The amendment made to sec.55(2)(a) by the Finance Act, 2001 is only prospective and applicable from assessment year 2002-03 only since the appeal of the assessee relates to assessment year 2001-02 this amendment cannot be applied retrospectively - the assessee, while transferring trademark, patents and designs to BIL has not transferred right to manufacture, produce or process biscuits - the assessee continued to carry on manufacturing and trading business is evident from sales tax assessment orders it is incorrect to hold that the assessee transferred its right to manufacture - assessee is entitled to claim the amount of ₹ 30 crores received from BIL as non-taxable capital receipt for the assessment year and the same is not liable for long term capital gains tax.
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