By a memorandum of understanding  dt. 13.04.1994, made between the appellant and three group Signature of  Shaw Wallace Company Group ,   consideration of the sum of Rs. 6,00,00,000 (Rupees Six crores only) was paid by  Shaw Wallace Company Group  to the assessee  as an advance against the  non-competition fee. As per the understanding the covenant shall remain in full force and effect for a period of 10 years from the date of these presents and this covenant will be absolutely and irrevocably binding on the assessee. The AO  held that the deed of covenant was held to be a colourable device to evade tax that is payable under Section 28(ii)(a) of the Act  hence taxable as revenue receipt . Order of  the AO  was  affirmed by the CIT (A).  On appeal the  Appellate Tribunal  allowed the appeal of assessee by a majority of 2:1  of the hoourable members . .On appeal  by the revenue the High Court held that   Rs. 6.60 crores paid was for as consideration  for sale of shares, rather than a payment under Section 28(ii)(a) of the Act accordingly taxable as capital gains . On appeal by the assessee  the Court held that, there is a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensation attributable to the negative/restrictive covenant. The compensation received for the loss of agency is a revenue receipt whereas the compensation attributable to a negative/ restrictive covenant is a capital receipt. Payment received as non-competition fee under a negative covenant was always treated as a capital receipt till AY 2003-2004. It is only w.e.f. 1-4-2003 that the said capital receipt is now made taxable u/s 28(va). It is well settled that a liability cannot be created retrospectively  (CA No  12044 of 2016 dt 23 -06 -2020 ( AY. 1995 -96)