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TMI Blog2015 (12) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Foreign Correspondent in India of a German news magazine Der Spiegel by an agreement dated 14th December 1970 at a monthly flat rate honorarium of $250 in addition to a further payment for any published contributions whose copyright would be with the German publisher. Either party could terminate the contract at the end of a calendar quarter by giving notice of six weeks. Der Speigel terminated the contract with effect from 1st December 1993 and paid compensation of DM 3,00,000 (Rs.53,82,000) for the association of the past 23 years and loss of work space. 3. In the original return the assessee claimed this amount as a revenue receipt but on revising the return, it was claimed to be a capital receipt. In the course of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st Dec., 1993." 5. Reliance was also placed on a letter dated 28th December 1993, from the German publisher wherein it was stated as under: "We are transmitting DM 3 lacs to your bank account in New Delhi as sign off compensation for performance of authorship/professional services for a continuous period of 23 years." 6. The Assessing Officer (AO) by the order dated 20th February, 1995 negatived the plea that the aforementioned amount was a capital receipt. It was held that the termination of contract with Der Spiegel did not mean that the Assessee had lost his right of authorship in future "for all the publications in the universe". It was observed that since the Assessee was free to contribute his article/stories etc. to any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Spiegel appointing the appellant as its foreign correspondent in India was a capital asset and the compensation received for the loss of asset constitutes the receipt of capital nature. The compensation of Rs. 53,82,000/- is therefore directed to be excluded from the appellant's total income." 8. By the impugned order dated 5th March, 2003, ITAT confirmed the order of CIT(A). 9. This Court has heard the learned counsel for the parties. While admitting the appeal on 23rd February, 2004, the Court framed the following question for consideration: "Whether the Income Tax Appellate Tribunal was correct in law in holding that the compensation of Rs. 53,82,000/- received by the assessee from the German publisher was a capital receipt not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years." The mere fact that the Assessee was free to earn through other sources would not make a difference to this position. Recently this court in Khanna and Annadhanam v. Commissioner of Income Tax [2013] 351 ITR 110 (Del) was considering the nature of a receipt in the hands of the Assessee, a firm of Chartered Accountants for the termination of an arrangement by which it was receiving referral work from abroad. After discussing the decisions of the Supreme Court in Kettlewell Bullen and Co. Ltd. (supra) and Oberoi Hotel Pvt. Ltd. v. CIT [1999] 236 ITR 903 (SC), this court held as under: "What appears to be the ratio of the judgment is that if the receipt represents compensation for the loss of a source of income, it would be capital a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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