https://www.taxtmi.com/caselaws?id=49224 SC held that compensation for termination of an agency is revenue in nature where the cancellation does not impair the assessee's trading structure or destroy a source of income, but is only an ordinary incident of a multi-agency business; that component was therefore taxable. It further held that consideration attributable to a post-termination restrictive covenant, operating independently of the business and preventing competition for a specified period, is a capital receipt and not taxable. Where one composite payment covers both elements, the amount may be severed and reasonably apportioned even without exact arithmetical segregation, so only the agency-loss component is brought to tax. en-us Tue, 02 Nov 1965 00:00:00 +0530 Mon, 07 Dec 2015 14:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49224 SC held that compensation for termination of an agency is revenue in nature where the cancellation does not impair the assessee's trading structure or destroy a source of income, but is only an ordinary incident of a multi-agency business; that component was therefore taxable. It further held that consideration attributable to a post-termination restrictive covenant, operating independently of the business and preventing competition for a specified period, is a capital receipt and not taxable. Where one composite payment covers both elements, the amount may be severed and reasonably apportioned even without exact arithmetical segregation, so only the agency-loss component is brought to tax. Case-Laws Income Tax Tue, 02 Nov 1965 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49224