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2018 (9) TMI 715 - HC - Income TaxRevision u/s 263 - why the non-compete premium should not be assessed as capital gains in terms of Section 55(2)(a) read with Section 28(v-a) - Held that:- Prior to an amendment brought about with effect from April 1, 2003, non-compete premium was judicially regarded as a capital receipt and there is a Supreme Court judgment [2011 (3) TMI 6 - SUPREME COURT] confirming such legal position. However, even in such judgment, the Supreme Court noticed that upon the amendment being introduced and sub-section (v-a) being brought into Section 28 of the Act, non-compete premium had to be regarded as a business income or revenue receipt. The show-cause notice issued under Section 263 referred to the Supreme Court judgment but failed to make the distinction in the Supreme Court judgment as to the manner of treatment of any non-compete premium on the basis of whether such premium was received prior to Section 28 of the Act being amended to incorporate sub-section (v-a) therein. It is now sought to be suggested on behalf of the Revenue that in view of the proviso to Section 28(v-a) of the Act the non-compete premium in this case ought to have been chargeable under the head of capital gains. However, such argument cannot be accepted as it was not indicated in the show-cause notice which limited the reasons for issuance thereof in paragraphs 5 and 6 quoted above and referred merely to the Supreme Court judgment without the change of law that was noticed in such judgment. The Tribunal was guided by the same Supreme Court judgment and took into account the change in law upon the introduction of sub-section (v-a) in Section 28 of the Act. On the subject and the Tribunal dealing with the case as made out in the show-cause notice, the order calls for no interference as no substantial question of law arises therefrom.
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