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TMI Blog2017 (12) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... l has allowed the appeal preferred by the assessee, reversing the view taken by the CIT (A) as well as AO. 3. This Court while admitting the appeals, framed the following substantial questions of law: 3.1 Appeal No. 118/2015 admitted on 7.10.2016 "Whether on the facts and circumstances of the case and in law, the ITAT has erred in deleting the addition of Rs. 8,16,22,040/- made by the Assessing Officer on account of amount received by the assessee towards settlement compensation" 3.2 Appeal No. 191/2016 admitted on 14.2.2017 "Whether onthe facts and in the circumstances of the case and in law, the ITAT was right in deleting the penalty levied u/s 271(1)(c) of the I.T. Act holding that the quantum additions on the basis of which pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-company and Atlantic Industries/Coco Cola India Pvt Ltd b. That the intention of the Settlement Agreement was to resolve the disputes and amicably settle all demands fully and finally. c. That in consideration of the mount received from Atlantic Industries, the Assessee-company would irrevocably and unconditionally release, acquit, waive, relinquish, withdraw all claims and complaints against Atlantic and its affiliates. d. That Satyam would not initiate and proceed with or prosecute any of the claims or the complaints and forever discharge Atlantic and/or its affiliates. e. That Satyam receives the consideration amount towards full and final settlement of all its outstanding differences, disputes, damages, claims or demands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greements: a). That certain disputes arose between the assessee company and Atlantic Industries/ Coco Cola India Pvt. Ltd. b) That the intention of the Settlement Agreement was to resolve the disputes and amicably settle all demands fully and finally. c) That in consideration of the mount received from Atlantic Industries, the assessee company would irrevocably and unconditionally release, acquit, waive, relinquish, withdraw all claims and complaints against Atlantic and its affiliates. d) That Satyam would not initiate and proceed with or prosecute any of the claims or the complaints and forever discharge Atlantic and/or its affiliates. e) That Satyam received the consideration amount towards full and final settlement of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered view the compensation in question was meant, intended and paid for withdrawal of aforesaid litigation instituted by assessee which could have resulted in many adverse consequences for the reputation of Coca Cola/Atlantic besides entailing huge cost and efforts of litigation. Relinquishment of right to sue is neither a capital asset nor taxable u/s 28 which provides specific types of receipt to be held taxable as business income. Relinquishment of right to sue does not find any mention therein. In this eventuality we have no hesitation to hold that the impugned amount of Rs. 8,16,22,040/- is a capital receipt not liable to Income Tax. The addition is deleted, assessee's grounds in this behalf are allowed. 5. In our considered opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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