9911796707
TMI Blog2005 (4) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... usinesses of the companies were sold vide agreement dated 9-2-1998 to M/s. Praxair Carbon Dioxide Pvt. Ltd., Bangalore. By separate agreement of even date, Dr. Bhaskar Kini and his brothers entered into non-competition agreement with M/s. Praxair Carbon Dioxide Pvt. Ltd. Non-competition agreement with three Kini Brothers was entered into for a total consideration of Rs. 3 crores. As per the agreement, Kini Brothers agreed not to engage in similar business in any capacity for a period of 10 years. Dr. Bhaskar Kini s share of consideration was Rs. 75 lakhs. This sum was disclosed in the return of income and exemption was claimed as capital receipt. The return filed by the assessee was accepted under section 143(1) of the Income-tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 55 and also clarified the provisions of sections 48 and 49. He further argued that the amendment effected by the Finance Act, 1997 has no bearing on the assessment under consideration and that section 55 is not a charging section. He further pointed out that under the agreement with M/s. Praxair Carbon Dioxide Pvt. Ltd., the assessee has not transferred any right to manufacture, etc. The agree- ment involved in the assessee s case is a restrictive covenant and not transfer of property whatsoever. The assessee had no right to manufacture in view of the agreement entered into by the assessee with M/s. Praxair Carbon Dioxide Pvt. Ltd. Therefore, he submitted that the addition made in this regard has to be deleted. On the other hand, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellant has not transferred any right to manufacture, etc. Such rights belonged to the business concerns and the consideration received for such transfer has been assessed in the hands of the business concerns. Agreement involved in the appellant s case is a restrictive covenant and not one for transfer of any property whatsoever. The appellant had no rights to manufacture. As such there is no question of transfer of any right to manufacture, produce or process any article or thing. 5.2 If there is any doubt in this regard, the matter becomes clear if one takes into account the amendments effected by the Finance Act, 2002 which are effective from 1-4-2003. One of the amendments has made non-compete fees taxable as business incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions of section 234B, interest can be charged in reassessment only such interest has been charged in the assessment made initially under section 143(1) or 143(3). Since no interest under section 234B had been charged in the case of the assessee under section 143(1), such interest should not have been charged in the reassessment. In the case of Kangra Bajri Co. v. Asstt. CIT [2004] 90 ITD 124, Chandigarh Bench of Tribunal held as under : "As regards questions as to whether interest under section 139(8)/215/234A/234B was chargeable in view of the fact that assessments completed by the Assessing Officer under section 146 were not regular assessments, emphasis was on regular assessment . Interest under these sections can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
