Commissioner Of Income Tax vs Shri Sanjiv Mishra
2008 Latest Caselaw 2079 Del

              THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Judgment delivered on: 25.11.2008


+              ITA 1313/2008


COMMISSIONER OF INCOME TAX                               ...    Appellant


                                    - versus -


SHRI SANJIV MISHRA                                       ... Respondent

Advocates who appeared in this case:

For the Appellant     : Ms Prem Lata Bansal with Mr Mohan Prakash Gupta and
                        Ms Anshul Sharma
For the Respondent    : None


CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

1. This appeal is from the order dated 31.03.2008 passed by the

Income-tax Appellate Tribunal in ITA No. 3834/Del/04 relating to the

assessment year 1997-98. The only question that had been raised

before the tribunal by the revenue in its appeal against the order passed

by the Commissioner of Income-tax (Appeals) was that the latter had

erred in deleting the addition of Rs 35,07,000/- by treating the same as

a capital receipt. The only facts that need to be noted are that the

assessee entered into an agreement on 14.10.1994 which contained a

negative covenant that the assessee could not, directly or indirectly,

without the prior written consent of M/s Intron Ltd (in which company

the assessee was working), establish or associate himself in a business

in India including that for the design, manufacture, marketing, sale,

import or export of specified household appliances. It was also agreed

that the assessee shall not compete in any manner whatsoever with the

business of Intron Limited or of its associated companies. In

consideration for entering into this negative convenant / non-compete

agreement, the assessee was paid a sum of Rs 35,07,000/- by AB

Electrolux. The issue arose as to whether this receipt was a capital

receipt and was, therefore, exempt from tax ?

2. The tribunal has examined the issue in detail and following

its decision in the cases of Inder Kumar Khosla and Saurav Srivastava

v. DCIT held that the receipt was in the nature of a capital receipt and,

therefore, was not exigible to income-tax. It may be noted that the

tribunal's decision in the case of Inder Kumar Khosla was taken in

appeal by the revenue before this court and the same was dismissed by

this court holding that no substantial question of law arose for

consideration. This is recorded in paragraph 4 of the impugned order

itself.

3. In any event, we find that this issue stands entirely covered

by the decisions of this court in the cases of Rohitasava Chand v.

Commissioner of Income Tax (ITA 611/2007 decided on 20.03.2008)

and CIT v. S. Dhanbal (ITA No.1228/2007 decided 04.09.2008). In

view of the ratio laid down in those decisions, the finding of the

tribunal that the receipt was in the nature of a capital receipt, cannot be

faulted. Consequently, we find that no substantial question of law

arises for our consideration.

The appeal is dismissed.

BADAR DURREZ AHMED, J

RAJIV SHAKDHER, J November 25, 2008 dutt