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TMI Blog2024 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... inance Act, 2016 w.e.f 01.04.2017 which makes the intent of the Legislature absolutely clear that the Legislature wanted the insertion of the word Profession alongwith Business . Hon'ble Supreme Court in the case of G.K. Choksi Co [ 2007 (11) TMI 7 - SUPREME COURT] made it clear that the word business occurring in clause (iv) of section 32(1) of the Act, by no stretch of imagination, can be said to include profession as well. By the same analogy, reference to business in section 32(ii)(e) of the Act would not amount to reference to profession. Applicability of provisions of section 28(ii)(e) - Impugned compensation whether received on termination or modification of terms and conditions of any contract - The word termination is used in reference to any on-going contract whereas the case of the assessee is non renewal of contract. In our humble opinion, non renewal does not mean termination. The assessee is a freelance journalist. She is not under employment of Spiegel Verlag. Therefore, there is no employer-employee relationship. The relevant clauses of the agreement mentioned elsewhere refer to renewal of the agreement which, if not renewed by 31.01.2000, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount received which is a capital receipt. 17. That the 'either-or' approach adopted against the Appellant by the Income Tax Department [Le. invocation of section 28(ii)(e) against the Appellant or alternatively, section 56(2)(xi) against the Appellant] is against fundamental prudence of Income tax laws. It is settled law that heads of income are mutually exclusive (i.e. if an Assessee cannot be brought under a particular head of income and is not taxable by operation of the provisions for that head, she cannot be simultaneously/consecutively brought to tax under another head) [refer Nalinikant Ambalal Mody v. S.A.L. Narayan Row, ClT 1966 (61) ITR 428 (Se)]. That the present matter Is not covered under section 28(ii)(e) of the Act. Hence, the same cannot be then brought to tax under 56(2)(xi) of the Act by adopting an 'either! or' approach as done against the Appellant. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Briefly stated, the facts of the case are that the assessee is an individual who filed her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. DR that during the assessment proceedings, the assessee claimed exemption u/s 4 of the Act and took a different stand before the ld. CIT(A). Though the assessee had paid self-assessment tax on the said compensation, yet later on, she changed her stand and claimed refund. The ld. DR further stated that even before this Tribunal, the assessee is claiming to be a professional and yet the said compensation is not claimed as professional receipt. 12. We have given thoughtful consideration to the rival contentions. The root cause of the quarrel is clause (vi) of the Agreement place at page 118 of the Paper Book which, inter alia, provides: This agreement can be terminated by both sides through a notice of six weeks at the end of an annual quarter. If not renewed by January 31,2000, the agreement will end of April 30, 2000. 13. Vide letter dated 22.02.2012, placed at pages 130 and 131 of the Paper Book, the assessee was informed as under: 14. Non renewal of the contract was challenged by the assessee in the Labour Court at Hamburg for declaration of her status as permanent employee of Spiegel Verlag. The Labour Court at Hamburg dismissed the claim as not admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived or receivable in cash or kind, under an agreement for (a) not carrying out any activity in relation to any business; or profession -------. 21. The phrase or profession has been inserted by the Finance Act, 2016 w.e.f 01.04.2017 which makes the intent of the Legislature absolutely clear that the Legislature wanted the insertion of the word Profession alongwith Business . 22. Our view is fortified by the decision of the Hon'ble Supreme Court in the case of G.K. Choksi Co. 295 ITR 376 wherein the facts were as under: The assessee, a firm of Chartered Accountants constructed a building for the purpose of residence for its low paid employees and claimed initial depreciation @ 40% under Section 32(1)(iv) of the Act. The Income Tax Officer (ITO) vide its order dated 15.1.1985 rejected the claim of the assessee-appellant on the ground that the said provision is applicable to an assessee carrying on business and the same is not available to a professional. On appeal, the Commissioner [Appeals] allowed the claim of the assessee. On further appeal, the Tribunal restored the order of the Assessing Officer. On reference the High Court upheld the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase has been used in certain sections as business or profession , but nowhere has the phrase been used as the business and profession . In fact, wherever the legislature intended that the benefit of a particular provision should be for both business or profession, it has used the words business or profession and wherever it intended to restrict the benefit to either business or profession, then the legislature has used the word either business or profession , meaning thereby that it intended to extend the benefit to either business or profession , i.e., the one would not include the other. The word business occurring in clause (iv) of Section 32(1), by no stretch of imagination, can be said to include profession as well. If the expression business is interpreted as including within its scope profession , it would not mean that the lacuna has been made good by giving a wider interpretation to the word business. There is nothing in Section 32(1)(iv) which envisages the scope of word business to include in it profession as well. If the expression business is interpreted to include within its scope profession as well, it would be doing violence to the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; or .. 30. Thus, it can be seen from the above that non renewal of any contract does not amount to retrenchment. 31. Considering the facts of the case in totality, we are of the considered view that provisions of section 28(ii)(e) do not apply on the given facts and therefore, the orders of the lower authorities are erroneous in law. 32. Now coming to the applicability of the provisions of section 56(xi) of the Act, the same read as under: Any compensation or other payment due to or received by any person by whatever name called in connection with termination of his employment or modification of the terms and conditions relating thereto. 33. Here also, reference is termination of employment. For our detailed reasons given in herein above, we are of the opinion that this section is also not applicable on the given facts. 34. Considering the facts of the case from all possible angles, we do not find any merit in the impugned addition. Therefore, the Assessing Officer is directed to delete the same. 35. Before parting, the allegation of the ld. DR that the assessee is taking contradictory stand before the lower authorities is factually incorrect. Firstly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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