9911796707
TMI Blog1981 (6) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... Fertilizers Ltd. from carrying on business in that name for the reason that the use of the name is "likely to mistake or deceive the public into the belief that the "defendants" company is the same as that of the "plaintiff" Premier Fertilizer Concern. The assessee succeeded before the Sixth Assistant Judge, in the City Civil Court in the suit, which raised th following four issues: 1. Have the plaintiffs acquired any right over the name Premier Fertilizers? 2. Are the plaintiffs manufacturing any fertilizer or marketing in the name of "Premier Fertilizers? 3. Had the defendants any knowledge of the plaintiffs name when the defendant company was registered? 4. Are the plaintiffs entitled to an injunction restraining the defendants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... style of Premier Fertilizers in connection with their business. 2. That both the Appellants (defendants) and Respondents (Plaintiffs) shall however be at liberty to take proceedings and should any third party adopt the name and style of Premier Fertilizers or any imitations thereof; and 3. That each party do bear his costs in this court". The Assessee had, therefore, received Rs. 25,000 from M/s. Premier Fertilizers. Ltd. on or near about 29th April, 1967, the date of memo of compromise. It is this amount, which is the subject matter of the present dispute in the assessment for asst. yr. 1968-69. 2. On the above facts, the ITO treated the receipt as income, rejecting the assessee's claim that it was either causal or a capital receipt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. It would also have to be seen whether it is a lumpsum paid in consideration of the loss of further income or whether it is an ad hoc amount unrelated to any variation of turnover or income. As the Tribunal has not addressed itself to all the facts and aspects as to how the amount was arrived at and what was the object with which the settlement was effected, and as we consider all these aspects to be relevant, in the absence of a consideration of all the facts, and aspects we do not find it possible to this question. We, therefore, return the reference unanswered and the Tribunal will have to dispose of the appeal by going into all the facts and in accordance with law." The appeal was therefore, re heard in pursuance of the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent with the order of the lower authorities. A permanent injunction was vacated for an agreed consideration. The assessee opted for a remedy by way of compensation in lieu of the injunction granted by the lower counts. Hence, the findings of facts do not get displaced because of the compromise at the High Court level. As for the manner in which the amount was arrived at, it was merely a matter of bargain between the lawyers representing both the parties. He claimed in ability to indicate the manner in which sum of Rs. 25,5000 was arrived at. The ld. Deptl. Rep. claimed that the assessee's failure to indicate the manner of computation of Rs. 25,500 clearly justified the assessment. He claimed that he was entitled to adverse inference on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights, though they had done it unknowingly. These facts have been found by the two lower courts and the compromise decree only substitutes a monetary compensation in the place of permanent injunction. These facts have also not been disputed in the orders of the authorities below. As to the manner of computation or Rs. 25,500, we have to accept that it is a matter of bargain. At the same time, we have no reason to reject the representation of the Dept. Rep. that this amount would have been arrived at with reference to the damages suffered by the assessee. It is also not impossible to accept his further argument that such damages might have been reckoned with reference to the loss or profits consequent on the competition. An estimate may hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court stage. The compensation would naturally refer to the damages suffered by the assessee permanently starting from the year 1960. They cannot be related to any single and much less to the accounting year under consideration. Mere receipt of the compensation does not make it taxable in the year when there is no element of income in the receipt. It also does not relate to the year as it is for the loss or profits over many years. This is what makes it a capital receipt. It is unnecessary to go into any detailed discussion of law. We do not consider it necessary to cite any authorities for our conclusion. It is because our finding is that it is compensation for the loss suffered by the assessee in having its name and consequently its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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