2016 (6) TMI 963

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....t the judgment of Income Tax Appellate Tribunal raising following questions for our consideration. "[A] Whether the Hon'ble ITAT has erred in law and on facts in deleting the penalty levied u/s. 271(1)(c) of Rs. 1,60,65,000/-on the issue of addition of Rs. 5,25,00,000/-made on account of non-compete fee." [B] Whether the Hon'ble ITAT has erred in law and on facts by relying upon the deci....

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....nal High Court, after analyzing the decision of ITAT, held that even as per ITAT the agreement was a composite agreement. In view of the totality of the above facts, I have no hesitation to hold that the claim of the assessee that the receipt from the non-compete agreement was bona fide. The genuineness of the agreement between the assessee and RPL is not in dispute. It is also not in dispute that....

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....ussed by me earlier, the claim of the assessee that the receipt was in the nature of capital receipt was a bona fide claim. Whether the claim is accepted or not, it is a matter of opinion and the issue of taxability of Rs. 5.25 crores is still sub judice before the Hon'ble High court. In view of the above, I am of the opinion that, on these facts, the decision of Hon'ble Apex Court in th....

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....en also pointed out by the ld. Counsel that the accounts of the assessee are duly audited and the auditors have not pointed out any defect in the credit of receipt from non-compete agreement to the capital account and therefore, have not qualified the audit report. In view of above, I agree with the ld. Counsel that if the assessee bona fide believed that receipt from the nonagreement is capital r....