COMMISSIONER OF INCOME TAX Vs. M. KRISHNAMOORTHY

JUDGEMENT

(1.) Revenue has filed this Tax Case Appeal under Section 260-A of the Income Tax Act, aggrieved by the order passed by the Income Tax Appellant Tribunal dated 18.12.2009 in respect of Assessment Year 2001-02, holding that the non-compete fee received by the assessee to the extent of Rs.4 Crore was a capital receipt and not revenue receipt.

(2.) Section 28 (va) of the Income Tax Act , was inserted by the Finance Act , 1992, with effect from 1.4.2003 holding that such non- compete fee shall be revenue receipt includible under the Head Profits and Gains of business taxable under Section 28 of the Act. Prior to 1.4.2003, a controversy involved in the present case was decided not only by a Division Bench of this High Court in the case of K.Ramaswamy Vs. Commissioner of Income Tax (261 ITR 356), but also in the decision of the Honourable Supreme Court in Guffic Chem (P) Ltd Vs. Commissioner of Income Tax ((2011) 332 ITR 602). Para 7 of the said Supreme Court decision is quoted below for ready reference:

(3.) In view of the above, the controversy is no longer res integra and the questions of law framed in the present Tax Case (Appeal) viz.,