TMI Blog2024 (5) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Inc. on executing a non-disclosure and release agreement after cessation of his services. HELD THAT:- As per ratio of judgment in Guffic Chem Private Limited [ 2011 (3) TMI 6 - SUPREME COURT] it is well settled that compensation attributable to a negative/restrictive covenant is capital receipt. According to judgment of Mrs. Tara Sinha [ 2017 (8) TMI 731 - DELHI HIGH COURT] a non compete fee under Non-Competition Agreement is not chargeable to income tax. In view of above said material fact especially assessee employee having received sum as per Deed of full and complete release and agreement on trade secrets and confidentiality containing non compete clause as per above said well settled principles of law being capital receipt is not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preferred present appeal. 5. Appellant/assessee submitted that Learned Assessing Officer and Learned Commissioner of Income Tax (Appeals) failed to appreciate that assessee had served notice of termination to its employer i.e. Coca-Cola India Inc. on 31.07.2006 and period expired on 31.10.2006. Assessee had entered into an agreement Deed of full and complete release and agreement on trade secrets and confidentiality with employer of assessee and other companies with their subsidiaries affiliates joint ventures and joint venture partners etc. The agreement provided for payment of five instalments from 30.11.2006 to 31.03.2007. None of the payments were amounts paid in lieu of salary of the assessee. Learned Assessing Officer and Learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that for the assessment year 1997-98 held that compensation attributable is capital receipt while compensation received for loss of agency is revenue receipt. Compensation received as non-competition fee was not taxable upto assessment year 2003-04 and held that if a contract is entered into in ordinary course of business any compensation received for its termination (loss of agency) is revenue receipt. 8. Appellant submitted that Hon ble High Court of Delhi in the case of CIT vs. Pritam Das Narang has held the orders of Learned CIT(A) provided that Clause (iii) of Section 17(3) had been brought in to account for joining bonus received from the prospective employer as profit in lieu of salary liable to be included as part of taxable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Inc., Coca- Cola Holdings India Inc., Coca-Cola India Private Limited and all their respective subsidiaries, affiliates, joint ventures, joint venture partners and benefit plans (collectively the Company ). As per agreement, assessee received Rs. 45,00,000/- in five instalments from 30.11.2006 to 31.03.2007. The assessee had filed return for the assessment year 2007-08 as Rs. 65,68,113/-. On scrutiny notices under section 143(2) dated 1.09.2008 was issued. Assessee claimed that amount of Rs. 45,00,000/- was not taxable as it was a capital receipt given to him as ex-gratia by Coca Cola India Inc. on executing a non-disclosure and release agreement after cessation of his services. Learned Assessing Officer by relying on amendment to section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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