TMI Blog2018 (9) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... emium 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian acquirer of the shares to the assessee herein. The assessment in respect of the relevant year was completed by an order of December 24, 2010. A show-cause notice was thereafter issued to the assessee under Section 263 of the Income Tax Act, 1961 on November 14, 2012 for the assessee to indicate 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) of the Act. Extracts from the show-cause notice of November 14, 2012 are quoted in the Appellate Tribunal s order of March 16, 2016 assailed by the Revenue herein. Paragraphs 5 and 6 of such show-cause notice, which indicated the reasons for the notice, are of some relevance: 5. The aforementioned amount of Non-Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment 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 reported at 332 ITR 602 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 of the Act 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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