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2018 (9) TMI 475 - HC - Income TaxNature of non compete fee received by the assessee - capital receipt or a revenue receipt - taxable as salary or not - distinction between the non compete fee and the good will - CIT(A) has allowed relief to the assessee - Validity of ITAT order in remanding back the matter to CIT(A) - Held that:- From the details furnished therein, it is clear that the assessee was never an employee in the new company and therefore, the assessee had a scope to compete. Further, there was no employer employee relationship between the payer company and the assessee and therefore, the payment could not be assessed under the head 'salary'. Further, the CIT (A) held that the legal representative of the deceased assessee had not raised any new point at first appellate stage for deciding the issues. Thus, in our considered view, there was no sufficient material before the Tribunal to remand the case for a fresh consideration at the first instance. The Tribunal does not dispute the covenants contained in the said agreement nor can it dispute the same in the absence of any evidence produced by the Department. In the said agreement, the non compete fee clause is clear by the assessee agreeing not to enter into any trade or start a similar production or enter into any competition with another party and the payment of non compete fee is for an action by the payee on a future date. The said payment of non compete fee is bound by a contractual requirement and it is a contractual right conferred on the assessee and in the event any violation, it was well open to the assessee to enforce the terms of the contract. The order of remand passed by the Tribunal is wholly unjustified and the facts as brought out by the CIT (A) after the first remand vide order dated 28.10.2016 are just and proper and in the absence of any new material produced by the assessee, the question of remanding the matter does not arise. Decided in favour of assessee
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