{"id":11923,"date":"2020-07-26T05:49:32","date_gmt":"2020-07-26T05:49:32","guid":{"rendered":"http:\/\/itatonline.org\/digest\/shivraj-gupta-v-cit-2020-117-taxmann-com-871-sc-www-itatonline-org-editorial-cit-v-shiv-raj-gupta-2014-52-taxmann-com-425-2015-372-itr-337-273-ctr-353-delhi-hc-reversed-followed-g\/"},"modified":"2021-05-01T17:58:30","modified_gmt":"2021-05-01T12:28:30","slug":"shivraj-gupta-v-cit-2020-117-taxmann-com-871-sc-www-itatonline-org-editorial-cit-v-shiv-raj-gupta-2014-52-taxmann-com-425-2015-372-itr-337-273-ctr-353-delhi-hc-reversed-followed-g","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/shivraj-gupta-v-cit-2020-117-taxmann-com-871-sc-www-itatonline-org-editorial-cit-v-shiv-raj-gupta-2014-52-taxmann-com-425-2015-372-itr-337-273-ctr-353-delhi-hc-reversed-followed-g\/","title":{"rendered":"Shivraj Gupta v .CIT  ( 2020) 425 ITR 420\/ 272 Taxman 391\/ 315 CTR 601\/ 192 DTR 20 ( SC) www.itatonline .org Editorial : CIT v Shiv Raj Gupta (2014) 52 taxmann.com 425\/ [2015] 372 ITR 337 \/ 273 CTR 353 (Delhi) (HC) reversed. Followed Guffic Chem (P.) Ltd. v. CIT (2011) (2011) 332 ITR 602 \/ 239 CTR 225 \/ 52 DTR 289 \/ 198 Taxman 78 \/ 225 Taxation 383 (SC) \/ 4 SCC 254."},"content":{"rendered":"<p>By a memorandum of understanding \u00a0dt. 13.04.1994, made between the appellant and three group Signature of \u00a0Shaw Wallace Company Group , \u00a0\u00a0consideration of the sum of Rs. 6,00,00,000 (Rupees Six crores only) was paid by \u00a0Shaw Wallace Company Group \u00a0to the assessee \u00a0as an advance against the \u00a0non-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 \u00a0held 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 \u00a0hence taxable as revenue receipt . Order of \u00a0the AO \u00a0was \u00a0affirmed by the CIT (A). \u00a0On appeal the \u00a0Appellate Tribunal\u00a0 allowed the appeal of assessee by a majority of 2:1 \u00a0of the hoourable members . .On appeal \u00a0by the revenue the High Court held that\u00a0 \u00a0Rs. 6.60 crores paid was for as consideration \u00a0for 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 \u00a0the Court held that, <strong>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<\/strong><span class=\"apple-converted-space\"><b>\u00a0 <\/b>(CA No\u00a0 12044 of 2016 dt 23 -06 -2020 ( AY. 1995 -96) <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>S.28(ii) (a): Business income &#8211;  Compensation -Capital or revenue \u2013 Capital gains- Restrictive covenant as to non-competition \u2013 Held to be not taxable -.Prior to assessment year 2013-14   [ S. 2 (47) , 4, 28(va) ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-11923","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-36j","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/11923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=11923"}],"version-history":[{"count":3,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/11923\/revisions"}],"predecessor-version":[{"id":17537,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/11923\/revisions\/17537"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=11923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=11923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=11923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}