COMMISSIONER OF INCOME-TAX Vs. SAROJ KUMAR PODDAR

JUDGEMENT

(1.) THIS appeal is directed against the order of the Income -tax Appellate Tribunal dated May 22, 2000. The main grievance raised in this appeal that the Tribunal has committed a mistake by treating Rs. 8,00,00,000 as capital receipt and not a revenue receipt.

(2.) THE assessee filed return on August 28, 1996, declaring total income of Rs. 21,95,010, and subsequently filed a revised return disclosing taxable income of Rs. 21,96,555. During the course of assessment, the Assessing Officer noticed that the assessee has disclosed a sum of Rs. 8 crores as receivable from Gillette Company, U.S., by virtue of 'non -compete agreement' dated January 18, 1996, the assessee claimed that it should be treated as capital receipt arising from the assessee's intellectual rights and as there was no cost to that asset there cannot be any capital gain tax also. The Income -tax Officer did not accept the claim of the assessee. He treated that amount as a professional receipt. In appeal before the Commissioner of Income -tax (Appeals), the Commissioner of Income -tax (Appeals) has also confirmed the view taken by the Assessing Officer. In second appeal before the Tribunal, the Tribunal has discussed the nature of receipt in the light of various decisions and held that the receipt is in the nature of non -taxable capital receipt.

(3.) LEARNED Counsel for the assessee has submitted that the assessee had earlier collaboration with Gillette Company to set up an industrial unit in India for manufacturing and marketing shaving blades and other shaving products manufactured by Gillette in the U.S.A. The Indian company known as M/s. Indian Shaving Products Limited (hereinafter referred to as 'I.S.P.') was formed, in which the assessee remained as a non -executive chairman. However, Gillette continued to remain the major and dominant shareholder of ISP.