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2002 (10) TMI 72 - MADRAS HIGH COURT"Whether, Tribunal was right in law in holding that the amount received by the assessee on the termination of distributorship agreement is only a capital receipt and hence not includible in the assessee's total income?" - The reasoning of the authorities below the Tribunal that the compensation has been quantified on three counts, i.e., the cost of trained man-power, compensation for cost of dealers and compensation for loss of profits and thus the payment received by the assessee was only reimbursement of such cost factors is not correct. That was only a method to quantify the lumpsum to be paid. Such method adopted cannot be stretched to the extent of concluding that the assessee had only recouped or reimbursed the expenses incurred in the past nor can it be said that the assessee had been reimbursed the profit that was not available to it, as a result of the termination of the agreement. - we are of the view that the Tribunal is right in its approach in treating the amount received by the assessee as a capital receipt. Hence the question is answered in favour of the assessee and against the Revenue.
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