Asstt.Commissioner of Income Tax,Circle-4, Nagpur V. M/s Vighanharta Investment and Finance Co .Pvt.Ltd, Nagpur

ITA 110/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1784 (ITAT-NAGPUR)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 30-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Assessee Lawyers: M MANI
• Keywords: Capital asset; Business income; Capital receipt
• Section: 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 110/NAG/2012 / ASSESSMENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6, NAGPUR. VS. M/S. VIGHANHARTA INVESTMENT AND FINANCE CO. PVT. LTD., C.A. ROAD, DESHPANDE LAYOUT, NAGPUR 440 008. PAN: AAACV 5915 G ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY : DR. MILIND BHUSARI ASSESSEE BY : SHRI M. MANI ! '#$ / DATE OF HEARING : 04-02-2013 %& ! '#$ / DATE OF PRONOUNCEMENT : 22-02-2013 '( / O R D E R PER RAJENDRA, AM THE FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY TH E ASSESSING OFFICER (AO) AGAINST ORDER DT.30.12.2011OF CIT(A)-II,NAGPUR. 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW ,THE LEARNED CIT(A) ERRED IN NOT UPHOLDING THAT ASSESSMENT ORDER PASSED U/S. 143(3) OF THE I.T.ACT WHEREIN THE ENTIRE AMOUNT OF RS. 98,00,000/- HAD BEEN TREATED AS REVENUE RECE IPT CHARGEABLE UNDER THE HEAD PROFITS & GAINS OF BUSINESS U/S. 28(VA)OF THE I.T.ACT. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CLT(A) ERRED IN ADMITTING AND ADJUDICATING THE CONTENTION THAT THE TRANSACTION WAS IN THE NATURE COVERED U/S. 50B OF THE I.T. ACT WITHOUT APPRECIATING THAT NO SU CH CONTENTION WAS MADE EITHER DURING ASSESSMENT PROCEEDINGS OR IN THE GROUND OF APPEAL A ND THAT THE SAME WAS SPECIFICALLY OBJECTED TO BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS, THE EVIDENCES AND ALLOWED THE APPEAL THROUGH THE OBJECTED BY THE 3.ANY OTHER GROUND WHICH MAY BE RAISED AT THE TIME OF HEARING. ITA NO. 110/NAG/2012 M/S. VIGHANHARTA INVESTMENT & FINANCE CO. P. LTD 2 2. ASSESSEE-COMPANY,BROKERS IN SHARES, FILED ITS RETURN OF INCOME ON 01.04.2008 DECLARING TOTAL INCOME AT RS. 13.45 LAKHS. ASSESSM ENT WAS FINALISED BY THE ASSESSING OFFICER (AO) U/S.143(3) OF THE INCOME TAX ACT,1961 (ACT) ON 23.12.2009 DETERMINING INCOME OF THE ASSESSEE AT RS. 1.13 CRORES. 3. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT AS SESSEE HAD ENTERED INTO TWO AGREEMENTS WITH M/S. SHARE KHAN LTD., (SKL) ON 10-0 5-2006 W.E.F. 01-04-2006. FACTS OF THE CASE AND THE SALIENT FEATURES OF THE AGREEME NTS CAN BE SUMMARIZED AS UNDER: I).THE ASSESSEE COMPANY WAS A SHARE BROKER AND HAD BEEN ASSOCIATED WITH SKL SINCE 2004. II).THE ASSESSEE CARRIED ON ITS BUSINESS FROM PREMI SES OWNED BY IT IN NAGPUR AND HAD DEVELOPED A NET WORK OF 2400 CLIENTS. III).THE ASSESSEE COMPANY HAD AGREED TO SELL, ASSIG N AND TRANSFER TO SKL CERTAIN TANGIBLE AND INTANGIBLE ASSETS.ACCORDING TO THE CL .2, THE AGREEMENT WAS ONLY IN RESPECT OF SALE, ASSIGNMENT AND TRANSFER OF THE TAN GIBLE AND INTANGIBLE ASSETS.SKL WAS NOT TAKING OVER ANY LIABILITY OF THE BUSINESS. IV).THE TANGIBLE ASSETS WERE SPECIFIED IN THE SCHED ULE TO THE AGREEMENT AS FURNITURE & FIXTURE,COMPUTERS,PRINTERS, OFFICE EQUIPMENT ETC.TH E INTANGIBLE ASSETS WERE SPECIFIED AS NET WORK OF 2400 CLIENTS,TRAINED AND KNOWLEDGEAB LE EMPLOYEES,RESEARCH REPORTS AND CREDIT RISK ASSESSMENT PROCEDURES.THE CONSIDERA TION FOR THE TANGIBLE ASSET WAS SPECIFIED AT RS. 5 LAKHS AND FOR INTANGIBLE ASSETS AT RS. 98 LAKHS. V).CLAUSE-7 OF THE AGREEMENT SPECIFIED THAT ON SIGN ING OF THE AGREEMENT, THE EXISTING STOCK-BROKER/SUB-BROKER AGREEMENT BETWEEN THE TWO P ARTIES OF 14 TH OCTOBER 2004 WOULD STAND TERMINATED. THE EXISTING CLIENTS OF TH E ASSESSEE COMPANY WERE TO BE CEASES TO BE ITS CLIENTS AND HAS TO BECOME THE DIRE CT CLIENT OF SKL. FURTHER, THE OFFICE PREMISES OF THE ASSESSEE COMPANY WAS BE LET OUT TO SKL ON MUTUALLY AGREED TERMS AND CONDITIONS. IT WAS ALSO AGREED THAT SKL WOULD A BSORB THE EMPLOYEES OF THE ASSESSEE COMPANY ON SUCH TERMS AND CONDITIONS AS AG REED UPON BETWEEN SUCH EMPLOYEES AND SKL AND THAT THE ASSESSEE COMPANY WOU LD HANDOVER POSSESSION OF THE TANGIBLE ASSETS TO SKL. VI).CLAUSE-8 OF THE AGREEMENT SPECIFIES THE OBLIGAT IONS OF THE ASSESSEE COMPANY. THE FIRST FOUR SUB-CLAUSES RELATED TO THE TRANSFER OF T ANGIBLE ASSETS WHEREIN THE ASSESSEE COMPANY MADE CERTAIN DECLARATION REGARDING TITLE, O WNERSHIP, EXCLUSIVITY OF SALE AND ENCUMBRANCES RELATING TO SUCH ASSETS. THE NEXT SUB -CLAUSE I.E., (E) STATED THAT THE ASSESSEE COMPANY UNDERTOOK THAT IT/HE WOULD NOT EX ECUTE ANY TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES ON ANY STOCK EXCHAN GE FOR, OR ON BEHALF OF , THE SAID CLIENTS OR ANY NEW CLIENTS, THROUGH ANY STOCK BROKE R, OTHER THAN THE TRANSFEREE, AT LEAST FOR A PERIOD OF THREE YEARS FROM THE DATE OF PAYMEN T OF THE CONSIDERATION AS MENTIONED IN CLAUSE 4 HEREINABOVE. FURTHER, THE TRANSFEROR WO ULD ENDEAVOUR TO ENSURE THAT THE SAID CLIENTS CONTINUE TO EXECUTE THEIR TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES ON THE STOCK EXCHANGE ONLY THROUGH THE TRANSFEREE DURI NG THE AFORESAID PERIOD OF THREE YEARS, AND WOULD NOT MAKE ANY RECOMMENDATION TO THE SAID CLIENTS TO EXECUTE THEIR TRANSACTIONS THROUGH ANY OTHER STOCK BROKER DURING THAT PERIOD. VII).BESIDES THE AGREEMENT DISCUSSED ABOVE, ANOTHER AGREEMENT STYLED AS NON- COMPETE AGREEMENT BETWEEN THE ASSESSEE-COMPANY AND SKL WAS ALSO ENTE RED INTO ON 10-05-2006.VIDE ITS CLAUSE NO.1, ASSESSEE-COMPAN Y AGREED TO REFRAIN FROM DIRECTLY OR INDIRECTLY ENGAGING OR CARRYING OUT OR PROVIDE SUPPORT IN RESPECT OF ANY SECURITY BROKING BUSINESS IN MUMBAI/INDIA, THAT IT WOULD REFRAIN FROM SOLICITING BUSI - NESS FROM ANY CLIENTS OF SKL FOR A PERIOD OF THREE YEARS.THE CONSIDERATION FOR SUCH ITA NO. 110/NAG/2012 M/S. VIGHANHARTA INVESTMENT & FINANCE CO. P. LTD 3 APPLICATION ON THE PART OF THE ASSESSEE-COMPANY WAS FIXED AT RS. 5 LAKHS AND SAME WAS OFFERED FOR TAXATION U/S. 28(VA) OF THE ACT. VIII).CONSIDERATION RECEIVED IN RESPECT OF THE TRAN SFER OF TANGIBLE AND INTANGIBLE ASSETS WAS TREATED AS CAPITAL RECEIPT BY THE ASSESSEE -THE RECEIPT WAS DIRECTLY TAKEN TO THE BALANCE SHEET OF THE ASSESSEE-COMPANY UNDER THE HEA D RESERVE AND SURPLUS. 3.1. AO WAS OF THE OPINION THAT SUB-CLAUSE (VA) OF SECTI ON 28 OF THE ACT WAS APPLICA - BLE TO THE FIRST AGREEMENT ALSO. HE HELD THAT AMBIT OF PROVISION OF SECTION 28(VA)WAS VERY VIDE AND IT ENCOMPASSED ALL TYPES OF RECEIPTS PURSUANT TO AGREEMENTS FOR TRANSFER BY AN ASSESSEE OF EVERY POSITIVE ADVANTAGE ASSOCIAT ED WITH ITS EXISTING BUSINESS TO ANOTHER PARTY, THAT THE CONSIDERATION OF RS. 98 LAK HS RECEIVED IN LIEU OF TRANSFER OF INTANGIBLE ASSETS WAS TAXABLE UNDER THE HEAD PROFI TS AND GAINS OF BUSINESS/ PROVISION,THAT INTANGIBLE ASSETS,MENTIONED IN THE SCHEDULED TO THE AGREEMENT WAS THE NETWORK OF 2400 CLIENTS, EMPLOYEES AND RESEARCH REP ORT/CREDIT RISK ASSESSMENT PROCEDURES,THAT THE COMMITMENT OF SKL HAD NO ASSIGN ABLE VALUE WITH REGARD TO RE- EMPLOYING THE EMPLOYEES OF THE ASSESSEE,THAT DETAIL S OF RESEARCH REPORT AND RISK ASSESSMENT-PROCEDURES WERE NOT FILED,THAT RS. 98 LA KHS HAD BEEN RECEIVED BY THE ASSESSEE-COMPANY IN LIEU OF PROVIDING SKL INFORMATI ON REGARDING 2400 CLIENTS AND ALSO RESEARCH REPORT AND RISK ASSESSMENT PROCEDURES AVAILABLE WITH THE ASSESSEE- COMPANY,THAT SUB-CLAUSE E OF CLAUSE-8 OF THE AGRE EMENT WAS IMPORTANT, THAT THE SAID CLAUSE MANDATED THAT ASSESSEE-COMPANY WOULD DI RECTLY OR INDIRECTLY-REFRAIN FROM ACTS WHICH WOULD HARM THE FUTURE SHARE BROKING BUSI NESS OF SKL IN RESPECT OF THE NET WORK OF CLIENTS DEVELOPED BY THE ASSESSEE-COMPANY, THAT INFORMATION REGARDING CLIENTS COULD NOT BE MADE AVAILABLE FOR EXPLOITATION BY POT ENTIAL BUSINESS RIVALS OF SKL, THAT ACTION OF THE ASSESSEE-COMPANY IN ENTERING INTO TWO SEPARATE AGREEMENTS WAS AN EYE- WASH TO CAMOUFLAGE REAL NATURE OF RECEIPTS FLOWING INTO IT.FINALLY, HE HELD THAT THE SUM OF RS. 98 LAKHS RECEIVED BY THE ASSESSEE-COMPANY WA S A REVENUE RECEIPT AND HE ADDED THE SAID INCOME TO THE TOTAL INCOME OF THE AS SESSEE. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA).DURING APPELLATE PROCEEDINGS,AN ADDITIONAL GROUND WAS RAIS ED BY THE ASSESSEE.ASSESSEE CLAIMED THAT TRANSACTION-IN-QUESTION WAS COVERED BY THE PROVISIONS OF SECTION 50B OF THE ACT AND NOT BY SECTION 28(VA) OF THE ACT. IT W AS FURTHER SUBMITTED THAT ASSESSEE HAD WORKED OUT THE LIABILITY U/S. 45 OF THE ACT ON THE BASIS OF THE NET WORTH AS REQUIRED BY SECTION 50B OF THE ACT, THAT INCOME OF THE ASSES SEE SHOULD BE ASSESSED AS PER THE PROVISIONS OF SECTION 50B AS A SLUMP SALE. AFTER C ONSIDERING THE REMAND REPORT OF THE AO AND THE SUBMISSION OF THE ASSESSEE, FAA HELD THAT ONLY RS. 5 LAKHS WERE PAID TO THE ASSESSEE AS NON-COMPETE FEE, THAT REST OF THE MONEY (RS. 98 LAKHS) WAS RECEIVED BY THE APPELLANT FROM THE ENTIRE SALE OF S TAKE IN THE ERSTWHILE BUSINESS CARRIED ON BY THE APPELLANT-COMPANY, THAT ENTIRE EARNING MA CHINERY/ASSETS HAD BEEN SOLD-OFF. HE FINALLY HELD THAT APPELLANTS GROUND THAT THE TR ANSACTION UNDER CONSIDERATION WAS EXEMPT AS CAPITAL RECEIPT WAS LIABLE TO BE REJECTED AS WELL AS THE AOS CONTENTION THAT THE TRANSACTION RESULTED IN BUSINESS INCOME. FINALLY, HE HELD THAT IT WAS A SLUMP SALE AND SAME HAD TO BE TAXED IN LIGHT OF THE PROVI SIONS OF SECTION 50B OF THE ACT. 5. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) SUBMITT ED THAT FAA HAS IGNORED THE REAL NATURE OF THE TRANSACTION, THAT BOTH THE AGREE MENTS WERE ABOUT NOT CARRYING OUT BUSINESS, THAT SKL HAD NOT TAKEN OVER THE LIABILITI ES OF THE ASSESSEE, THAT ASSESSEE ENTERED INTO TWO AGREEMENTS FOR PREVENTING COMPETIT ION, THAT PROVISIONS OF SEC. 28(VA) WERE APPLICABLE TO FACTS OF THE CASE UNDER CONSIDER ATION. AUTHORISED REPRESENTATIVE ITA NO. 110/NAG/2012 M/S. VIGHANHARTA INVESTMENT & FINANCE CO. P. LTD 4 (AR) SUBMITTED THAT IT WAS A SIMPLE MATTER OF SLUM- SALE, THAT AGREEMENTS ENTERED INTO BY THE ASSESSEE AND THE SKL CLEARLY ESTABLISHED THA T RS. 5 LAKHS WERE PAID AS NON- COMPETE FEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD.IN OUR OPINION,BASIC QUESTIONS TO BE DECIDED IS WHETHE R THE AMOUNT RECEIVED BY THE ASSESSEE (RS. 98 LAKHS) IN ACCORDANCE WITH TERMS AN D CONDITION OF AGREEMENT FOR SALE OF ASSETS WAS A SLUMP SALE OR CAN IT BE TAXED U/S. 28(VA) OF THE ACT ? 6.1. WE FIND THAT THE FAA HAS HELD THAT TRANSACTION A S LUM SALE, BUT HE HAS NOT DISCUSSED AS HOW THE TRANSACTION COULD BE TREATED A SLUMP SALE? TO THAT EXTENT, HIS ORDER IS NON-SPEAKING.SLUMP SALE IS AN OLD CONCEPT OF TAXATION JURISPRUDENCE AND FROM 01-04-2000, CERTAIN AMENDMENTS HAVE BEEN MADE IN TH E ACT IN THIS REGARD.THE TERM 'SLUMP SALE',SPECIFICALLY DEFINED IN SECTION 2(42C) OF THE ACT, MEANS TRANSFER OF ONE OR MORE UNDERTAKINGS AS A RESULT OF SALE FOR A LUMP SU M CONSIDERATION WITHOUT VALUES BEING ASSIGNED TO THE INDIVIDUAL ASSETS AND LIABILI TIES IN SUCH SALES.BROADLY SPEAKING IN THE CASE OF A SLUMP SALE THE SALE IS FOR A LUMP SUM PRICE AND THERE IS A TRANSFER OF THE ENTIRE BUSINESS FOR A FIXED PRICE.THE SALE CONSIDER ATION IS,NOT ATTRIBUTABLE TO THE INDIVIDUAL ASSETS OF THE ASSESSEE. BOTH IN THE CASE OF A SLUMP SALE AS WELL AS IN THE CASE OF ITEMISED ASSETS A TRANSFER OF LAND, BUILDING, PL ANT AND MACHINERY MAY AND PROBABLY WOULD BE INVOLVED.HOWEVER,WHERE THERE IS A SLUMP SA LE, THE TRANSFER OF LAND, BUILDING, PLANT AND MACHINERY FORMS PART OF THE TRANSFER OF T HE ENTIRE BUSINESS.ON THE OTHER HAND WHERE THERE IS AN ITEMISED SALE THE TRANSFER OF LAN D,BUILDING, PLANT AND MACHINERY TAKES PLACE IN SPECIE. 6.2 . HERE WE WOULD LIKE TO HIGHLIGHT THE PROVISIONS O F SEC.28(VA)ALSO THAT WERE INVOKED BY THE AO.SEC.28 BEARS TITLE AS PROFITS AND GAINS OF BUSINESS OR PROFESSION. IT HAS BEEN PROVIDED UNDER S. 28(VA) THAT ANY SUM, WHE THER RECEIVED OR RECEIVABLE IN CASH OR KIND,UNDER AN AGREEMENT FOR(A) NOT CARRYIN G OUT ANY ACTIVITY IN RELATION TO ANY BUSINESS ; OR (B) NOT SHARING ANY KNOW-HOW, PAT ENT, COPYRIGHT, TRADE-MARK, LICENCE, FRANCHISE OR ANY OTHER BUSINESS OR COMMERC IAL RIGHT OF SIMILAR NATURE OR INFORMATION OR TECHNIQUE LIKELY TO ASSIST IN THE MA NUFACTURE OR PROCESSING OF GOODS OR PROVISION FOR SERVICES.AN ANALYSIS OF THE SAID SECT ION MAKES IT CLEAR THAT IT HAS FIVE INGREDIENTS; NAMELY, (A) DEFINITE SUM OF MONEY, (B) RECEIVED OR RECEIVABLE BY THE PERSON, (C) EITHER IN CASH OR IN KIND, (D) UNDER AN AGREEMENT, AND (E) FOR NOT CARRYING OUT ANY ACTIVITY IN RELATION TO ANY BUSINESS. 6.3. NOW, WE WOULD LIKE TO DISCUSS THE PECULIAR FACTS OF THE PRESENT CASE.THOUGH ASSESSEE HAS ENTERED INTO TWO AGREEMENTS, YET FOR B ETTER UNDERSTANDING THE FACT BOTH HAVE TO BE READ TOGETHER. IN TAXATION MATTER SUBSTA NCE IS ALWAYS MORE IMPORTANT THAN THE FORM. WHAT HAS TO BE SEEN IS THE TRANSACTION AS A WHOLE AND NOT IN PIECES.IF AGREEMENT OF SALE OF ASSETS IS ANALYSED, ONE THIN G EMERGES DISTINCTLY THAT BASIC PURPOSE OF THE SAID AGREEMENT WAS TO RESTRAIN THE A SSESSEE-COMPANY FROM ENTERING IN TO COMPETITION WITH SKL.CLAUSE 8.E OF THE SAID AGRE EMENT READS AS UNDER : THE TRANSFEROR UNDERTAKES THAT IT/HE WILL NOT EXEC UTE ANY TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES ON ANY STOCK EXCHANGE FOR, OR ON BEHA LF OF, THE SAID CLIENTS OR ANY NEW CLIENTS,THROUGH ANY STOCK BROKER,OTHER THAN THE TRA NSFEREE ,AT LEAST FOR A PERIOD OF 3 (THREE) YEARS FROM THE DATE OF PAYMENT OF THE CONSIDERATION MENTIONED IN CLAUSE 4 HEREIN ABOVE. FURTHER THE TRANSFEROR WILL ENDEAVOUR TO ENSURE THA T THE SAID CLIENTS CONTINUE TO EXECUTE THEIR TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES ON THE STOCK EXCHANGE ONLY THROUGH THE TRANSFEREE DURING THE AFORESAID PERIOD OF 3 (THREE) YEARS AND WILL NOT MAKE ANY RECOMMENDATION TO THE SAID CLIENTS TO EXECUTE THEIR TRANSACTIONS THROUGH ANY OTHER STOCK BROKER DURING THIS PERIOD. ITA NO. 110/NAG/2012 M/S. VIGHANHARTA INVESTMENT & FINANCE CO. P. LTD 5 WE WOULD LIKE TO REFER TO PROVISIONS OF CLAUSE 7 OF THE SAME AGREEMENT,WHICH READ AS UNDER : 7.IT HAS BEEN AGREED THAT (A)THE EXITING STOCK BROKER AND SUB-BROKER AGREEMEN T DATED 14TH OCTOBER, 2004 ENTERED INTO BETWEEN THE TRANSFEROR AND THE TRANSFEREE SHALL BE TERMINATED. (B)UPON THE PAYMENT OF THE ENTIRE BALANCE CONSIDERA TION STATED IN CLAUSE 4 ABOVE, ALL THE CLIENTS INCLUDING REMISIERS TRANSACTING THROUGH THE TRANSFEROR,A LIST WHEREOF IS GIVEN IN THE SCHEDULE HEREUNDER WRITTEN (THE SAID CLIENTS) WIL L CEASE TO BE CLIENTS OF THE TRANSFEROR AND WILL BECOME THE DIRECT CLIENTS OF THE TRANSFERE E. FOR THIS PURPOSE THE TRANSFEREE MAY, IF NECESSARY ENTER INTO NEW STOCK BROKER AND CLIENT AGREEMENTS WITH THE SAID CLIENTS. C)THE SAID OFFICE PREMISES WILL BE LET OUT TO THE T RANSFEREE ON SUCH TERMS AND CONDITIONS AND AT SUCH CONSIDERATION AS MAY BE MUTUALLY AGREED UP ON BETWEEN THE PARTIES HERETO 6.4. FROM THE ABOVE IT IS CLEAR THAT ASSESSEE AND NOT SO LD THE PROVERBIAL LOCK-STOCK AND BARREL TO SKL.OFFICE BUILDING ,WHICH IS THE MAIN IT EM OF THE ASSETS OF THE ASSESSEE,WAS NOT SOLD.SECONDLY,SKL DID NOT TAKE OVER THE LIABILI TIES OF THE ASSESEE-COMPANY.CLAUSE 4(IV)IS NOTEWORTHY IN THIS REGARD WHICH PROVIDES TH AT ALL THE LIABILITIES OF THE TRANSFEROR WHETHER PERSONAL OR RELATING TO THE UNDE RTAKING SHALL CONTINUE TO BELONG TO AND SHALL BE BORNE PAID AND DISCHARGED BY THE TRANS FEROR ONLY.THOUGH,THE AGREEMENT TALKS OF THE ASSETS AS PER SCHEDULE,BUT IN THE SCHE DULE THERE IS NO DESCRIPTION OF TANGIBLE AND INTANGIBLE ASSET IS GIVEN.EVEN IF THE TRIAL BALANCE OF 31 ST MARCH OF THE YEAR UNDER CONSIDERATION IS LOOKED IN TO IT BECOMES CLEAR THAT STAND TAKEN BY THE FAA WAS NOT BASED ON FACTS.IN THESE CIRCUMSTANCES WE AR E OF THE OPINION THAT FAA WAS NOT RIGHT IN HOLDING THAT TRANSACTION UNDER CONSIDERATI ON WAS A SLUMP SALE. SO REVERSING HIS ORDER WE HOLD THAT IT WAS BASICALL Y A NON-COMPETE AGREEMENT TITLED AS AGREEMENT FOR SALE OF ASSETS.IN OUR OPINION NOMENCL ATURE OR RECITAL OF AN AGREEMENT DO NOT AND CANNOT CHANGE THE REAL NATURE OF A RECEIPT. SUBSTANTIALLY, PAYMENT MADE BY SKL WAS TO PREVENT THE ASSESSEE FROM SHARE BROKING BUSINESS ESPECIALLY WITH 2400 CLIENTS.ANY PAYMENT MADE IN PURSUANCE OF AN AGREEME NT TO WARD OFF COMPETITION IS A REVENUE RECEIPT W.E.F. 1ST APRIL, 2003,AS ENVISAGED BY SECTION 28(VA) OF THE ACT. THEREFORE, REVERSING THE ORDER OF THE FAA WE DECIDE BOTH THE GROUNDS OF APPEAL IN FAVOUR OF THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS ALLOWED. * +, - -# / '01 ! + 23 ! ' 45. ORDER PRONOUNCED BY E-COURT AT MUMBAI ON THIS 22 ND OF FEBRUARY, 2013 +7 0,' - &8 / 22 9 # , 2013 & '( %&:' ; . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) ', / JUDICIAL MEMBER $ ', / ACCOUNTANT MEMBER +7 MUMBAI, ;' DATE: 22 ND FEBRUARY, 2013 TNMM ITA NO. 110/NAG/2012 M/S. VIGHANHARTA INVESTMENT & FINANCE CO. P. LTD 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE :' ' //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT