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TMI Blog2019 (2) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... al ("the Tribunal" for short) dated 9.10.2015 raising following question for our consideration:- "Whether on the facts and circumstances of the case and in law, the Tribunal is correct in holding that a sum of Rs. 50.23 crore received by the assessee is to be treated as capital receipt liable to be taxed as capital gain and not as business income under Section 28(va) of the I.T. Act?" 2. Brief f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer, therefore, in view of such non-compete clause in the agreement, the receipt could be the assessee's income in terms of Section 28(va) of the Income Tax Act, 1961 ("the Act" for short) and consequentially taxable under the head 'Profits and Gains of Business and Profession' (b). The assessee carried the matter in appeal. The Commissioner of Income Tax (Appeals) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete clause was merely consequent to the transfer of business. 4. We are broadly in agreement with the view of the Tribunal. The Revenue does not dispute the factual findings of the Commissioner of Income Tax (Appeals) that the assessee had transferred the entire business as a going concern. In that view of the matter, the entire sale consideration of Rs. 54.73 crore could never have been attribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete assurance. 5. We notice that Clause (va) of Section 28 pertains to any sum whether received or receivable, in cash or kind, under an agreement, inter alia for not carrying out any activity in relation to any business or profession. A non-compete agreement would therefore fall in this clause. Proviso to said clause (va), however, provides that the said clause would not apply, to any sum whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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