2024 (5) TMI 389

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....y filing return for the assessment year 2007-08 on 31.07.2007. The case of assessee was picked up under scrutiny. Notice under section 143(2) was issued to the assessee on 01.09.2008 asking the assessee's appearance on 16.09.2008. Shri S.K. Virmani assessee's representative appeared on behalf of assessee on 16.09.2008. Notice under section 142(1) along with questionnaire was issued on 20.08.2009 asking the assessee to appear on 3.09.2009. Shri S.K. Virmani advocate and assessee's Representative appeared and filed submissions. Assessing Officer passed order dated 31.12.2009 and enhanced income of assessee by Rs. 45,00,000/- charge interest under section 234 'A', 'B' 'C' and penalty under section 271(1)(c) of the Income Tax Act, 1961. 3. Ass....

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....e definition of profits in lieu of salary, in section 17(3) has been extended by insertion of sub-clause (iii) to include any amount due to or received whether in lumpsum or otherwise by an assessee from any person before joining any employment with that person or after cessation of such employment with that person." 6. Appellant submitted that Section 28(va) provides "The new provision has been introduced to override the Court Judgements, which held that sum received for restrictive covenant is a capital receipt. However, there is no corresponding amendment to provide that the payee would get deduction as revenue expenditure..." 7. Appellant submitted that the distinction between section 17(3)(iii) and section 28(va) have been wrongly ig....

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....epartmental Representative submitted that after cessation of employment, assessee entered into an agreement "Deed full and complete release and agreement of trade secrets and confidentiality" and received Rs. 45,00,000/-. The assessee did not offer the amount of Rs. 45,00,000/- to tax as taxable claiming it to be a capital receipt. After amendment of section 17(3) of Income Tax Act, 1961 amount of Rs. 45,00,000/- received by assessee from his erstwhile employer was taxable. So appeal may be rejected. 11. From examination of record in light of the aforesaid rival contention it is crystal clear that assessee had given notice of termination to his employer Coca-Cola India Private Limited on 31.07.2006 and the notice period and period expired ....