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2014 (6) TMI 175 - AT - Income TaxAddition of non-compete fee as salary income – Held that:- Following Commissioner of Income-tax – XIII Versus Kanwaljit Singh [2012 (12) TMI 168 - DELHI HIGH COURT] - 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 all the work done under the agreement was performed by the employee for the benefit of the employer – Decided against Assessee. Deletion of interest u/s 14A of the Act – Held that:- The business income declared by the assessee towards receipt of non-compete fees has been taxed by the AO under the head ‘Salaries’ without granting any deduction for certain expenses which were originally claimed by the assessee - there is no business income left with the assessee and consequently there are no expenses for which any deduction could be allowed under Chapter IV-D of the Act - once there is no expenditure claimed as deduction by the assessee, there can be no question of making any disallowance u/s 14A because the disallowance under the section pre-supposes the claim for deduction of expenses - unless there is a deduction for any expenditure incurred by the assessee, there cannot be any disallowance u/s 14A – Decided against Revenue. Levy of interest u/s 234B and 234C of the Act – Held that:- The assessee has accepted that the addition being the non-compete fees receivable by him from Uzind Corporation should be assessed as salary income - the character of the amount of non-compete fees in the hands of the assessee is not final so far – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Revenue.
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