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TMI Blog2018 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... a revenue character and was therefore taxable by virtue of Section 17(3) or under Section 28(va) of the Act. 2. The facts are that the assessee was promoter and Director of Integra Overseas Pvt. Ltd. (hereafter referred to as "Integra") established to manufacture two-wheelers in India. On account of shareholding transfer, he was appointed as Managing Director of Integra; M/s Suzuki Motor Corporation became a major shareholder in Integra and eventually that company's name was changed to M/s Suzuki Motorcycle India Pvt. Ltd. The assessee terminated his relationship as a joint venture partner in M/s Suzuki Motorcycle India Pvt. Ltd. and stepped down as Managing Director of that company. He entered into an agreement whereby Suzuki India agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge of regulatory matters, negotiating skills and strategic planning expertise to any other person in India in the two wheeler segment" it cannot be regarded as non-competition fee because it has not been paid for not competing with the payer, but for not providing the benefit of his knowledge, expertise, skills etc. to any other person in the two wheeler segment. The views expressed by Shri Bhardwaj in his opinion and the contention by Shri Aggarwal that section 28(va) taxes a sum received for a restrictive covenant in relation to a business, but not a profession is also supported by the observations in paragraph 28 on page 692 of Kanga and Palkhivala's "Law and Practice of Income-tax" that clause (va) of section 28 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was interpreted by the Supreme Court in Guffic Chem. P. Ltd. (supra) was applied and there is no infirmity to the impugned order. 5. In the present case, it is apparent that the assessee received Rs. 1.32 crores for only 2 years. Concededly, there can be two ways of looking at such receipts. In all such cases, there cannot be a straight jacket black and white formula; the analysis to be conducted by the tax authorities or administration has to be a fact dependent one. The assessee had a dual role - both as shareholder and as Managing Director. As Managing Director, he received only the non-compete amounts for two years. It is quite possible that he could have been given this amount as a capital receipt at one go for whatever reasons and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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