2007 (12) TMI 471

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....nsideration before the learned Tribunal was whether the receipt received by the assessee from the General Electric Company USA (GE) for agreeing to refrain from carrying on competing business under a restrictive covenant is income exigible to tax ? After going through the various facts the Tribunal noted that the amount received is capital receipt and is not liable to tax. Before the Tribunal, the....

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.... non-compete fees and exclusivity rights. The Tribunal noted that this amendment propose to insert a new provision in the IT Act, 1961 for charging to tax any sum received or receivable in cash or in kind under an agreement for not carrying out activity in relation to any business or not to share any know-how, patent, copyright, licence, franchise or any other business or commercial right of simi....

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....d in the said instruction that where the capital asset transferred is in the nature of a right to manufacture, produce or process an article or thing, recourse to s. 55(2) can be made only from asst. yr. 1998-99 in respect of any consideration received for the transfer thereof which includes extinguishments or curtailment of such right. Sec. 55(2)(a) was amended w.e.f. 1st April, 1998. Considering....