TMI Blog2008 (8) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-8-2008 - DR. S. RA DHA KRISHNAN and S. J. KATHAWALLA JJ. N. A. Kazi for the appellant. Vipul B. Joshi for the respondent. JUDGMENT The judgment of the court was delivered by 1. S. J. KATH AWA LLA J. - The above appeal was admitted on the following substantial question of law. "Whether the amount received by a cable operator -for not competing with the purchaser in future is taxable? 2. The relevant facts in the matter are briefly set out hereunder: (a) One Amol Narendra Dalal was carrying on his sole proprietary business of cable T.V. operations and was running cable T. V. network in Borivli (West) and in other areas of Mumbai suburbs since January 1989, in the name of M/s. Home Video Services. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said order passed by the Commissioner of Income-tax (Appeals) on July 16, 1998, the assessee filed an appeal before the Tribunal. The Departmental representative contended before the Tribunal that the assessee had already transferred his clientele to the said company under the first agreement dated November 25, 1994, in terms of which he received Rs. 12,50,000 and, therefore, there was nothing left for the assessee to make any further transfer under the second agreement under which he received an amount of Rs. 11 lakhs. It was contended that the said amount of Rs. 11 lakhs was, therefore, towards the transfer of the goodwill of the assessee. (e) The Tribunal by its order dated August 28, 1999, gave a categorical. finding in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the assessee had already transferred his clientele to the said company under the first agreement dated November 25, 1994, for a consideration of Rs. 12,50,000 there was nothing left for the assessee to transfer and, therefore, the amount of Rs. 11 lakhs received by the assessee under the second agreement dated November 25, 1994, should not be treated as amount received for not competing in future with the purchaser, but should be treated as amount paid to the assessee for transfer of the goodwill of the assessee in favour of the purchaser. Mr. Kazi submitted that the assessee has received the amount of Rs. 11 lakhs for not competing with the purchaser in future, the same is not taxable but if he has received the sum for transferring hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h him to make any further transfer under the second agreement and, therefore, the second agreement was only for transfer of the goodwill for which the assessee received Rs. 11 lakhs and which ought to be taxed is untenable and baseless. It is very clear that under the first agreement the assessee transferred his entire clientele (business) to M/s. Aasia Industrial Technologies Pvt. Ltd. (purchaser) for a consideration of Rs. 12,50,000 and under the second agreement undertook not to compete with the said company in future in the suburbs for a consideration of Rs. 11 lakhs which amount admittedly cannot be made taxable under the heading "Capital gain". 5. In view of the aforesaid we answer the above question of law in favour of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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