TaxTMI 
TaxTMI 
2012 (10) TMI 719
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....tured the management set up of HDX. By a letter dated 06.04.1999, Deluxe Corporation also terminated the services of the assessee but offered him continued employment for a limited tenure from 03.04.1999 to 01.08.1999, on same terms and remuneration as he was previously employed. In addition, Deluxe Corporation also offered to pay the assessee an extra ordinary compensation of USD 10 lacs, for retention and severance of his services. 50% of USD 10 lacs i.e. USD 5 lacs were paid on signing and agreeing to the terms of letter dated 06.04.1999. The balance USD 5 lacs were paid in August 1999, on continued employment of the assessee coming to an end. 4. The assessee, while submitting his income tax return for the A.Y. 2000-01 (under consideration) attached a note dated 08.05.2000 to the "computation of income", claiming that non compete fee of USD 10 lacs received by him from Deluxe Corporation is a capital receipt not chargeable to tax. Before doing so the assessee had determined the tax payable on income after including the sum of USD 10 lacs as part of his income. The assessee deposited the tax amount so determined. However, in his return of income the assessee did not include th....
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....89/Del/2009 order dated 12.2.2010 - Rayata Corporation (P) Ltd. Vs. Union of India (2007) 161 Taxman 127 (Mad) 6. The ld. AR on the other hand tried to justify the first appellate order. He submitted that there was disclosure of all the necessary and material facts relating to the receipt of the amount of USD 10 lacs and taxability of the amount was a debatable issue. The assessee was under bona fide belief that the receipt was capital in nature hence not chargeable to tax and at the same time the assessee had determined the tax payable on income after including the sum of USD 10 lacs as part of his income. He had deposited the tax amount so determined. He submitted further that the explanation of the assessee about the amount received was neither found false nor unsubstantiated. The ld. AR also referred contents of Para nos. 6 to 13 of the appointment letter dated 6.4.1999 made available at page nos. 8 to 12 of the paper book filed on behalf of the assessee. He pointed out that as per the condition imposed upon, the assessee was not to divulge, communicate or pass on any confidential information of HDX or Deluxe or any of their respective subsidiaries to any person who is....
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....n 10, due to or received by an assessee from an employer or a former employer or from a provident or other fund to the extent to which it does not consist of contributions by the assessee or interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy. Explanation - For the purposes of this sub-clause, the expression "key man insurance policy" shall have the meaning assigned to it in clause (10D) of section 10;]" In the appeals preferred by the parties before the Tribunal raising the issue on the taxability of the receipt the Tribunal vide its order dated 31.3.2009 in ITA nos. 3365 & 2629/Del/2004 has held that the amount paid to the assessee was because of termination of employment in terms of letter dated 6.4.1991, therefore, the payment of USD 10 lac received by the assessee is chargeable to tax as profit in lieu of salary u/s 17 (3) (i) of the Act. The Tribunal has discussed the issue in detail and decided it in view of several decisions relied upon by the parties before it. The assessee had placed reliance on several decisions like CIT Vs. Shyam Sunder Chhapria 305 ITR 181 (MP); Rohit....
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....come or furnished inaccurate particulars of such income. (d) has concealed the particulars of the fringe benefits or furnished inaccurate particulars of such fringe benefits,] he may direct that such person shall pay by way of penalty,- [***] (ii) in the cases referred to in clause (b), [in addition to tax, if any, payable] by him, [a sum of ten thousand rupees] for each such failure;] (iii) in the cases referred to in clause (c) [or clause (d)], [in addition to tax, if any, payable] by him, a sum which shall not be less than, but which shall not exceed [three times], the amount of tax sought to be evaded by reason of the concealment of particulars of his income [or fringe benefits] or the furnishing of inaccurate particulars of such income [or fringe benefits]. He may direct that such person shall pay by way of penalty. Explanation 1.- Where in respect of any facts material to the computation of the total income of any person under this Act, (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the CIT to be false, or (B) such person offers an explanation which he is n....
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....rupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment u/s 143 (1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case was payable by them. For a ready reference Para no. 16 to 21 of the said decisions are being reproduced hereunder: "16. The proposition of law which emerges from this case. when considered in the backdrop of the facts of the case before the Court, is that so long as the assessee has not concealed any material fact or the factual information given by him has not been found to be incorrect, he will not be liable to imposition of penalty under section 271(1)(c) of the Act even if the claim made by him is unsustainable in law provided that he either substantiates the explanation offered by him or the explanation, even if not substantiated is found to be bona fide. If the explanation is neither substantiated nor shown to be bona fide. Explanation 1 to section 271(1)(c) would come in to play and the assessee will ....