TaxTMI 
TaxTMI 
2011 (7) TMI 43
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....o.1449 (Cal)/2000 for the Assessment Year 1997-98 and thereby dismissing the appeal preferred by the assessee. Being dissatisfied, the assessee has come up with the present appeal. The facts leading to the filing of this appeal may be summed up thus: a) The appellant was one of the promoters and a Director of Ghaghra Sugar Limited (hereinafter referred to as the company) which has a factory for the manufacture of sugar. The assessee is also Director of Ganges Sugar Mills Pvt. Ltd. which had applied for and received a license to set up a new sugar factory in the region in which the company had its sugar factory. According to assessee, he had the requisite technical and financial expertise required for setting up and running a sugar....
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....to tax only from the Assessment Year 1998-99 under the head Capital Gains. The assessee also drew the attention of the Assessing Officer to the circular being instruction No.1964 dated March 17, 1999 issued by the Central Board of Direct Taxes to the effect that noncompetition fee could not be subjected to tax prior to the Assessment Year 1998-99. e) The Assessing Officer, however, subjected the said amount to tax under the head "other sources" vide order dated March 3, 2000 for the Assessment Year 1997-98. f) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who by order dated August 29, 2000 allowed the same. The Commissioner of Income-tax (Appeals) accepted the conte....
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.... findings in this behalf are not based on any material, wholly arbitrary, unreasonable and perverse?" Mr. Khaitan, the learned Senior Counsel appearing on behalf of the appellant, strenuously contended before us that for the assessment year in question the non-competition fee should be treated to be in the nature of capital receipt and as such, is not taxable. In support of such contention, Mr. Khaitan relied upon a decision of the Supreme Court in the case of Guffic Chem. Pvt. Ltd. vs. Commissioner of Income-tax, reported in (2011) 332 ITR Page 602. Mr. Khaitan next contended that even the Assessing Officer, while passing the order of assessment, did not dispute the genuineness of the transaction of acceptance of Rs.25 lakh as no....
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....parties and after going through the decision of the Supreme Court in the case of Guffic Chem. Pvt. Ltd. vs. Commissioner of Income-tax (supra), we find that the point involved herein is squarely covered by the said decision as the case relates prior to April 1, 2003 and consequently, the payment should be treated to be capital receipt and not taxable. The next question is whether in the case before us, there was any scope for the Tribunal to enter into the genuineness of the non-competition fees received by the assessee. In the case before us, the Assessing Officer did not dispute the genuineness of the transaction but taxed the amount as a revenue receipt. When the assessee preferred an appeal before the CIT (Appeals), ....