9911796707
TMI Blog2017 (12) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... ishment of right to sue is neither a capital asset nor taxable u/s 28 which provides specific types of receipt to be held taxable as business income. Relinquishment of right to sue does not find any mention therein. In this eventuality we have no hesitation to hold that the impugned amount of 8,16,22,040/- is a capital receipt not liable to Income Tax. When the party has compromised and withdraw the litigation, if that compensation is received, it is always to be treated compensation. In our considered opinion, the Tribunal has not committed any error in allowing the appeal and we are in complete agreement with the view taken by the Tribunal. Decided in favour of assessee and against the Department. X X X X Extracts X X X X X X X X Extracts X X X X ..... compromise and the Tribunal while considering the matter has observed as under: 2.17 We have heard the rival contentions and perused the material available on record. We deem it expedient to first decide the issue on merits of taxability of compensation. Ld. CIT(A) while deciding the appeal has held the impugned amount to be specifically taxable u/s 28(va) of the IT Act, same has been reproduced above. Revenue has accepted this order. Consequently on merits, the issue before us is narrow - Whether the amount in question can be held to be falling within the scope of sec. 28(va). Search in the premises of Cabana group was conducted on 31-7-09 whereas the settlement agreement in question and other agreements were executed much earlier on 24- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of action, rights, debts, liabilities, promises, agreements, demand, damages, accountings and costs and expenses of any kind whatsoever. g. That the intent of the agreement is to completely release all claims against Atlantic. i. That on receipt of settlement amount, Satyam will be left with no other outstanding claims, demands, differences, disputes or liabilities against Atlantic. In our considered view, all the clauses of the agreement read together reflect that the real intent, objective and purpose of the payment of compensation as per Settlement Agreement was to ensure withdrawal of all the pending litigation by Satyam from various forums instituted for breach of terms of conditions. The dominant consideration for compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yam would take care of any and all or present and future claims, causes of action, rights, debts, liabilities, promises, agreements, demand, damages, accountings and costs and expenses of any kind whatsoever. i) That the intent of the agreement is to completely release all claims against Atlantic. j) That on receipt of settlement amount, Satyam will be left with no other outstanding claims, demands, differences, disputes or liabilities against Atlantic. 2.18 With all these observations on record, we are unable to comprehend as to how any part of the compensation can be estimated or treated as paid for any non compete agreement as inferred by Ld. CIT(A) in his findings at page 39 to following effect:- "It may be noted that by suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
