COMMISSIONER OF INCOME TAX Vs. ASHOK MEHRA

JUDGEMENT

(1.) THE assessee herein was appointed as Chief Executive Officer (CEO) by M/s. SEIL Limited with effect from 05.01.1998, though the appointment letter containing the terms and conditions was issued on 21.08.1998. Two years thereafter, the assessee left the services of the SIEL Limited with effect from 30.09.2000. Apart from his terminal dues, he was also given an amount of Rs.42 lakhs as "non compete fee". The agreement dated 09.02.2001 was entered into in this behalf between M/s SIEL Limited and the assessee as "Non Compete Fee Agreement". As per this Agreement, the assessee agreed not to undertake any employment directly or indirectly nor engage or provide any advisory or consultancy services to any entity whether overseas corporate body, domestic or joint venture company engaged in the business or manufacture and sale of sugar, edible oil and caustic soda for a period of three years from the date of this Agreement. However, while making the appointment, tax at source was also deducted by the erstwhile employer , viz., M/s. SIEL Limited. The assessee had claimed credit of TDS of Rs.14,43,700 on the ground that the receipt of aforesaid amount of Rs.42 lakhs, in the given circumstances, was to be treated as capital receipt, not chargeable to tax. This contention was not accepted by the AO on the ground that even his employer had treated the same as revenue receipt in the hands of assessee and had deducted tax at source. However, the CIT(A) deleted the addition holding that it was a capital receipt and not revenue receipt, which would be chargeable to tax. The said decision has been upheld by the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal?) vide its impugned judgment dated 24.10.2008.

(2.) THE perusal of the order of the Tribunal would show that it has relied upon the judgment of this Court in the case of Rohitasava Chand v. Commissioner of Income Tax [171 Taxman 147) wherein position of law on the point has been discussed in much greater details by this Court wherein various judgments of the Supreme Court including Commissioner of Income Tax v. Best and Co. (Pvt.) Ltd. [(1966) 60 ITR 11 (SC)] were relied upon as well.

(3.) WE are, therefore, of the opinion that no substantial question of law arises. This appeal is accordingly dismissed. Appeal dismissed.