2008 (8) TMI 460

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....al was carrying on his sole proprietary business of cable T.V. operations and was running cable T. V. network in Borivli (West) and in other areas of Mumbai suburbs since January 1989, in the name of M/s. Home Video Services. The assessee sold/transferred his business as a going concern to M/s. Aasia Industrial Technologies Pvt. Ltd., a company of the Hinduja group, vide agreement dated November 25, 1994, for a consideration of Rs.12,50,000 (first agreement). On the same day, i.e., on November 25, 1994, the assessee entered into another agreement with M/s. Aasia Industrial Technologies Pvt. Ltd. (the purchasers) where-under the assessee agreed not to carry on any business or activity in future in respect of cable T.V. net work and not to co....

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....Rs. 11 lakhs. It was contended that the said amount of Rs. 11 lakhs was, therefore, towards the transfer of the goodwill of the assessee. (e) The Tribunal by its order dated August 28, 1999, gave a categorical. finding in favour of the assessee that there was no transfer of the goodwill under the second agreement where under the assessee received Rs. 11 lakhs from the said company. It was held that the said amount of Rs. 11 lakhs was received by the assessee in view of his having undertaken not to carry on any business in competition with the said company, i.e., M/s. Aasia Industrial Technologies Pvt. Ltd. The said amount of Rs. 11 lakhs received by the assessee was, therefore, in view of such restriction and negative covenant, namely no....

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....ee in favour of the purchaser. Mr. Kazi submitted that the assessee has received the amount of Rs. 11 lakhs for not competing with the purchaser in future, the same is not taxable but if he has received  the sum for transferring his goodwill in favour of the purchaser, the same is required to be taxed. After drawing attention of Mr. Kazi that the Tribunal has come to a categorical conclusion that there is no transfer of goodwill under the second agreement dated November 25, 1994, and there is no evidence that the said agreement is sham and that the amount of Rs. 11 lakhs was received by the assessee for having undertaken not to carry on any business in future in competition with the said company in the territory of Mumbai suburbs, we c....