TaxTMI 
TaxTMI 
2021 (9) TMI 648
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..../IT-91/15-16 dated 03.02.2017 was received in this office on 23rd March 2017. In the order, the Assessee's appeal was dismissed. Thus the appeal, if any, was to be filed before the ITAT on or before 23rd May 2017, the time barring date. 3. It is humbly submitted that, in the instant case, due to oversight and also the fact that the CIT(A) has dismissed the appeal of the assessee, the Appeal could not be filed in time. However, on verification of records, it was found that the Ld. CIT(A) has erred in deciding that the consideration received by the assessee should be assessed u/s 56(1) whereas the Assessing officer had rightly added the amount u/s 28(iv) as the said arbitration award was in nature of one time compensation and was squarely covered u/s 28(iv). 4. Therefore, as the decision of the CIT(A) was erroneous and appeal should have been filed before the ITAT within prescribed time limit which was not filed due to oversight. It is requested that the delay of 254 days in filing the appeal before the ITAT against the order of the CIT(A) may kindly be condoned and this office may be allowed to file appeal before the ITAT in the instant case." 3. After perus....
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....missioner (Appeals) in holding that the amount received by virtue of arbitration award is taxable under the head "Income from other sources" under section 56(1) of the Act. Thus, he submitted, the issue is squarely covered by the decision of the Tribunal. 7. The learned departmental representative, though, agreed that the issue is covered by the decision of the Tribunal; however, she relied upon the observations of the assessing officer. 8. We have considered rival submissions and perused materials on record. Pertinently, against the decision of the learned Commissioner (Appeals) holding that the amount of Rs. 28 crores awarded by the Arbitrator is taxable as "Income from other sources" under section 56(1) of the Act, both, the assessee and the revenue filed appeals in the Tribunal. While deciding assessee's appeal in ITA No.3523/Mum/2017 dated 02-04-2018, the Tribunal upheld the decision of learned Commissioner (Appeals) with the following observations:- "20. As regards the merits of the case, we find that the assessee has received an arbitration award for Rs. 28 crores, upon relinquishment of her rights in the partnership of M/s. P. N. Writer & Co. Here it may be g....
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....of his obligations as set out in the Consent Terms. Though her husband had no relation to M/s P.N.Writer & Co., it was agreed that the husband shall also sign Consent Terms and shall also transfer back assets mentioned in condition no.9 which was in the name of the appellant as well as in the name of her husband. 22. When the above facts are viewed in the light of the fact that there are no positive balance of the capital account of the assessee with M/s. P. N. Writer & Co., the question of the balance in her capital account being returned back to her certainly does not arise. The above facts clearly indicate that the arbitration award was received by the assessee not for retirement from partnership firm but was in lieu of relinquishment of all her rights, claim and demand of any nature whatsoever against the partnership firm M/s P.N.Writer & Co. and all other entities owned and controlled by the firm and partners and for withdrawing all the Suits against all the entities. It is further to be noted here that as per para 9 of the concerned terms, the assessee and her husband who had nothing to do with the said firm in any capacity are to execute all necessary documents to f....
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....year 1997. Neither does the Arbitration Award or Consent Terms anywhere specify that the sum of Rs. 28 crores represents the payment to the assessee for her retirement from P.N.Writer & Co. As a matter of fact, the basis of the Arbitration Award was never given. As rightly observed by the ld. Commissioner of Income Tax (Appeals) that the retirement of a partner from the firm has to be an evident fact and is not required to be indirectly inferred or to be guessed in substance. The assessee has received a consideration in lieu of a composite bundle of conditions which included giving up her rights and interests in assets which have no connection with her interest in the firm or its assets and also for withdrawal of all suits/legal proceedings filed by her against the other persons and against firms and entities owned or controlled by them. 25. As rightly held by the ld. Commissioner of Income Tax (Appeals) since the Arbitration Award is in cash on the touch stone of the Hon'ble jurisdictional High Court decision in the case of Mahindra & Mahindra Limited v CIT 261 ITR 501, section 28(iv) cannot be invoked. However, the ld. Commissioner of Income Tax (Appeals) is very cor....