MUNINDRA SINGH, Jaipur V. ITO, Jaipur

ITA 225/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4927 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA DHK
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Earning of tax free income; Capital receipt

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 225/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 SHRI MUNINDRA SINGH S/O SHRI JAGPAL SINGH 92, GAURAV NAGAR, CIVIL LINES, JAIPUR CUKE VS. THE ITO WARD 7(1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACZPS 7350 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI K.L. MOOLCHANDANI, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23 /11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-3 , JAIPUR DATED 14-12-2015 FOR THE ASSESS MENT YEAR 2012-13 RAISING FOLLOWING GROUND OF APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ER RED IN MAKING AND CONFIRMING ADDITION OF RS. 35.00 LACS MA DE ON ACCOUNT OF DISALLOWANCE OF COMPENSATION RECEIVED O N TERMINATION OF AGREEMENT OF LEGAL SERVICES CLAIMED AS CAPITAL RECEIPTS:- ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 2 (A) WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE AND ALSO IGNORING THE CASE LAWS C ITED ON THIS ISSUE. (B) AND ALSO IGNORING THE FACT AS EVIDENT FROM THE RETURN FILED FOR THE PERIOD OF RETAINERSHIP THAT DU RING THE PERIOD UNDER CONSIDERATION THE MAIN INCOME OF THE A PPELLANT WAS FROM SUCH EMPLOYMENT ONLY. THUS THE LOSS OF EMPLOYMENT IS ABUNDANTLY PROVED AND MAKES IT CRYSTA L CLEAR THAT RS. 35.00 LACS RECEIVED BY THE ASSESSEE AS COM PENSATION ON TERMINATION OF THE RETAINERSHIP IS CAPITAL RECEI PT AND NOTHING ELSE. THUS THE ADDITION SO MADE AND CONFIRMED ON THE BASI S OF SUCH INCORRECT FINDING DESERVES TO BE DELETED SU MMARILY. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE YEAR 2012-13 WAS FILED BY THE ASSESSEE ON 29-03-2013 DE CLARING TOTAL INCOME OF RS. 13,80,580/- IN THE STATUS OF INDIVIDUAL THRO UGH E-FILING. THE CASE OF THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT ON 14-03-2014. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY THROUGH CASS. ACCORDINGLY, THE NOTICE WAS ISSUED ON THE ASSESSEE ON 8-08-2013 WHICH WAS DULY SERVED UPON THE ASSESSEE O N 16-08-2013. IN COMPLIANCE TO NOTICE, THE LD. AR OF THE ASSESSEE AT TENDED THE PROCEEDING AND FILED THE REQUIRED DETAILS BEFORE THE AO. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED A RE PLY DATED 23-06-2014 NARRATING VARIOUS DETAILS AS UNDER ABOUT THE SOCIET Y AND THE AGREEMENT ENTERED INTO WITH THE SOCIETY. ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 3 (I) AS PER COPY OF THE AGREEMENT DATED 14-06-2001 ( COPY ENCLOSED ALONGWITH THE CERTIFIED COPY OF THE MINUTE S OF RESOLUTION PASSED BY THE SOCIETY ON 01-06-2001 FOR READY REFERENCE), THE SERVICES OF THE UNDERSIGNED WERE RE TAINED ON CONTRACT BASIS TO UNDERTAKE ALL THE LEGAL WORK CONC ERNING THE CASE SOCIETY AND WILL REPRESENT THE SOCIETY IN ALL COURTS AND LEGAL FORUM AT JAIPUR AS DIRECTED BY THE SOCIETY ON THE MONTHLY RETAINRSHIP FEE OF RS. 21,000/- AND THE PER IOD OF RETAINERSHIP SHALL BE FOR 25 YEARS, W.E.F. 1 ST AUGUST, 2001. IN CASE OF TERMINATION OF SUCH RETAINERSHIP CONTRACT, THE UNDERSIGNED SHALL BE PAID COMPENSATION OF RS. 35 LA CS PLUS 15% INTEREST IN CASE OF NON-PAYMENT OF THE COMPENSA TION WITHIN AGREED PERIOD (II) ON TERMINATION OF THE CONTRACT, THE UNDERSIGNE D CLAIM FOR COMPENSATION OF RS. 35,00,000/- (RS. THIRTY FIV E LACS WITH INTEREST) AS PER ABOVE TERMS AND CONDITION OF THE AGREEMENT. (III) INITIALLY DISPUTING SUCH CLAIM, THE SOCIETY FINALLY GAVE IN AND CAME FORWARD FOR A COMPROMISE AS PER CO PY OF S.B.CIVIL WRIT PETITION (M) NO. 9348/2010 (COPY ENC LOSED FOR READY REFERENCE)AND HAS PAID RS. 45,00,000/- VI DE CHEQUE NO. 526310 DATED 30-11-2011 (AFTER TDS) I.E. DURING THE YEAR UNDER CONSIDERATION. THE AO TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE, AGREEMENT OF THE ASSESSEE WITH M/S. MARUTI NANDAN E DUCATIONAL SOCIETY AND THE COMPROMISE AS PER COPY OF S.B. CIVIL WRIT PETITION (M) NO.9348/2010, CAME TO THE CONCLUSION THAT THIS SUM OF RS. 35.00 LACS IS TREATED AS ASSESSEES INCOME UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. THE CONCLUSIVE PARA OF THE AO IS REPRODUCED AS UNDER:- ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 4 IN VIEW OF THE ABOVE DETAILED DISCUSSION, I HAVE FOUND THAT THE CLAIM OF THE ASSESSEE MADE THROUGH T HE SUBMISSIONS THAT RS. 35,00,000/- BEING PART OF CONS ULTANCY FEE IS NOT FOUND ACCEPTABLE. WHILE DECIDING THIS IS SUE, IT IS ALSO MENTIONING HERE THAT OF COURSE THE ACTUAL INTE NTION OF THE STATUTE OF TREATING CERTAIN RECEIPTS AS CAPITAL REC EIPTS AND ALSO THE REAL SPIRIT OF DETAILED DELIBERATIONS OF V ARIOUS HON'BLE COURTS ON THIS POINT CANNOT BE TERMED AS A N ESCAPE ROOT FROM PAYING DUE TAX ON THE INCOME ACTUALLY EAR NED BUT TO PROVIDE RELIEF IN THE CASE OF GENUINE HARDSHIP O F LOSING SOURCE OF INCOME. IN THE CASE OF ASSESSEE NO SUCH G ENUINE HARDSHIP HAPPENED AS DISCUSSED ABOVE. IT IS A FACT THAT THE ASSESSEE HAS NOT SHOWN RS. 35,00,000/- OUT OF THE R ECEIPT OF THE CONSULTANCY FEES OF RS. 50,00,000/- DURING THE YEAR. ACCORDINGLY, ASSESSEE'S CLAIM EXEMPTION OF AN AMOUN T OF RS. 35,00,000/- OUT OF THE TOTAL RECEIPT OF CONSULTANCY FEES OF RS. 50,00,000/- TREATING IT CAPITAL RECEIPT IS NOT ALLO WED AND THIS AMOUNT OF RS. 35,00,000/- ADDED TO THE INCOME OF TH E ASSESSEE TREATING IT AS REVENUE RECEIPT IN THE LIGH T OF ABOVE DETAILED DISCUSSION. HENCE THIS SUM OF RS. 35,00,00 0/- IS TREATED AS ASSESSEE'S INCOME UNDER THE HEAD OF INCO ME FROM BUSINESS AND PROFESSION AND ADDED TO THE INCOME OF THE ASSESSEE . 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAD CONFIRMED T HE ACTION OF THE AO BY OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , FINDING OF THE AO AND SUBMISSION OF THE APPELLANT. AO HAS GIVEN VALID REASONS FOR TREATING THE RECEIPTS OF TH E ASSESSEE AS REVENUE RECEIPTS INSTEAD OF CAPITAL RECEIPTS IN PAG E 8 TO 12 OF HIS ORDER. I FIND FORCE IN THE REASONS GIVEN BY THE AO. THE HON'BLE RAJASTHAN HIGH COURT HAS ALSO AWARDED THE AMOUNT AS LEGAL FREES/ RETAINERSHIP FEES. IT IS SEEN THAT APPELLANT RECEIVED RS. 50 LACS FROM THIS SOCIETY OUT OF WHICH HIMSELF OFFERED RS. 15 LACS AS INCOME FOR THE YEAR UNDER AP PEAL. THE AMOUNT BALANCE WAS CLAIMED AS CAPITAL RECEIPT TOWAR DS CANCELLATION OF THE PROFESSIONAL ASSIGNMENT AND NO BASIS HAS ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 5 BEEN GIVEN AS TO HOW RS. 35.00 LACS RELATES TO SUCH REVOCATION OF SERVICE. FURTHER APPELLANT IS HAVING REGULAR INCOME FROM OTHER ASSIGNMENTS. THEREFORE, IT IS NOT A CASE OF LOSS OF SOURCE OF INCOME AS HAS BEEN CLAIMED BY HIM . THE CASE LAWS CITED BY THE APPELLANT ARE DISTINGUISHABLE ON FACTS AS ASSESSEE IS FREE TO ACC EPT PROFESSIONAL ASSIGNMENT OTHER THAN GIVEN BY THE SOC IETY. HE WAS NOT PREVENTED FROM TAKING UP ANY ASSIGNMENT AFT ER TERMINATION OF AGREEMENT NOR HIS REGISTRATION WITH THE BAR COUNCIL WAS CANCELLED TO PRACTICE BEFORE OTHER JUDI CIAL AUTHORITIES. SO, I SEE NO REASON TO INTERFERE IN TH E AOS ORDER. ACCORDINGLY, THIS GROUND IS DISMISSED. 2.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ACTION OF THE AO BY TREATING THE AMOUNT OF RS. 35.00 LACS RECEIVED BY THE ASSESS EE ON ACCOUNT OF COMPENSATION RECEIVED ON TERMINATION OF AGREEMENT O F LEGAL SERVICES CLAIM AS REVENUE RECEIPTS. THE ASSESSEE FILED THE WRITTEN SUBMISSION AND ALSO THE DECISION IN ITA NO. 1286/2008 DATED 29-01 -2013 OF HON'BLE DELHI HIGH COURT IN THE CASE OF KHANNA AND ANNADHA NAM VS. CIT WHICH HAVE BEEN TAKEN INTO CONSIDERATION. 2.4 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN QUESTION IS THAT THE ASSESSEE HAD RECEIVED TOTAL RS. 50.00 LACS FROM M/S. MARUT NANDAN EDUCATI ONAL SOCIETY OUT OF WHICH RS. 15.00 LACS HAS BEEN DECLARED BY THE ASSES SEE AS PROFESSIONAL ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 6 INCOME AN PAID DUE TAX THEREON. THE REMAINING AMOUN T OF RS. 35.00 LACS RECEIVED BY THE ASSESSEE IN PURSUANCE OF CLAUSE 7 O F THE AGREEMENT ON ACCOUNT OF THE TERMINATION OF THE EMPLOYMENT WAS CLAIMED AS EXEMPT INCOME BEING A CAPITAL RECEIPT. THE RELEVANT PORTI ON OF CLAUSE 7 OF THE AGREEMENT IS AS UNDER:- 7. THAT IN CASE OF TERMINATION OF SERVICES OF SHR I MUNINDRA SINGH, ADVOCATE, HE SHALL BE PAID COMPENSA TION OF RS. 35 LACS (RS. THIRTY FIVE LACS ONLY) WITHIN TWO MONTH FROM THE DATE OF TERMINATION OF HIS SERVICES/RETAINERSHIP. I N CASE ENGINEERING COLLEGE COULD NOT COMMENCE ITS ACTIVITI ES OR IS DISCONTINUED OR CLOSED THEN NO COMPENSATION SHALL B E PAID. IF THE COMPENSATION AMOUNT IS NOT PAID WITHIN AGREED PERIO D THEN INTEREST @ 15% P.A. WILL BE PAID FROM THE DATE OF T HE TERMINATION OF SERVICE/ RETAINERSHIP/ THE LOWER AUTHORITIES HAVE DENIED SUCH CLAIM OF TH E ASSESSEE IN THEIR RESPECTIVE ORDERS. IT REVEALS FROM THE AGREEMENT OF THE ASSESSEE WITH M/S. MARUT NANDAN EDUCATIONAL SOCIETY THAT THE ASSESSEE WAS DUTY BOUND TO GIVE PREFERENCE TO THE WORK OF THE SOCIETY OVER HIS OTHER LEGAL PRACTICE AND THEREFORE, THE COMPENSATION CLAUSE WAS INSERTED IN THE AGREEMENT. IT IS ALSO NOTED FROM THE SUBMISSIONS OF THE LD. AR OF TH E ASSESSEE THAT BY VIRTUE OF THIS CONTRACT THE ASSESSEE HAD BEEN IN TH E EMPLOYMENT OF THE SOCIETY AS AN ADVOCATE SINCE AUGUST 2001 AND THE AS SESSEE HAD BEEN RECEIVING RETAINERSHIP FEES TILL DEC. 2007 AND IN P URSUANCE TO THE AGREEMENT AND CONTINUOUS INCREASE IN THE WORK OF TH E SOCIETY, THE OTHER ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 7 PRACTICE OF THE ASSESSEE GOT DETERIORATED. THE LD. AR FURTHER SUBMITTED THAT SUBSEQUENTLY THE SOCIETY HAD STOPPED MAKING PA YMENT OF THE RETAINERSHIP FEES TO THE ASSESSEE AND AFTER PROLONG ED LITIGATION THE DISPUTE WAS RESOLVED VIDE COMPROMISE DATED 15-11-2011 (PAGE S 3 TO 6 ASSESSEE'S PAPER BOOK) FILED IN S.B. WRIT PETITION NO. 9348/20 10 TILED AS MARUT NANDAN EDUCATIONAL SOCIETY VS. SHRI MUNINDRA SINGH AND OTHERS AND A COPY THEREOF WAS PRESENTED BEFORE THE ARBITRATOR SH RI TRILOK SINGH CHOUDHARY VIDE PROCEEDINGS DATED 23-12-2011 (PAGES 7 & 8 OF ASSESSEE'S PAPER BOOK). AS PER THE RESOLUTION, RS. 35 LACS WAS THE AMOUNT OF COMPENSATION PAID TO THE ASSESSEE FOR TER MINATION OF HIS SERVICES IN ACCORDANCE WITH THE CLAUSE 5 OF THE AGR EEMENT DATED 14-06-2001 MADE BETWEEN THE ASSESSEE AND MARUT NAND AN EDUCATIONAL SOCIETY AND RS. 15.00 LACS WAS PAID TOWARDS ARREARS OF HIS EMOLUMENTS PLUS INTEREST THEREON. IT IS NOTED THAT THE ASSESSE E HAD SHOWN RS. 15 LACS AS PROFESSIONAL INCOME AND PAID DUE TAX THEREON AND RS . 35 LACS RECEIVED ON ACCOUNT OF TERMINATION OF EMPLOYMENT AS PER CLAUSE 7 OF THE AGREEMENT WAS SHOWN BY THE ASSESSEE AS EXEMPT BEING A CAPIT AL RECEIPT. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE RELIE D ON DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF KHANNA AND ANNADHAN AM VS. CIT (SUPRA) ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 8 IN WHICH THE CONCLUSIVE OBSERVATION OF THE HON'BLE HIGH COURT IS AS UNDER:- 7. WE MAY REFER TO ONE MORE JUDGEMENT OF THE SUPREM E COURT WHICH IS REPORTED AS OBEROI HOTEL (P) LTD. VS . CIT (1999) 236 ITR 903. THERE THE ASSESSEE WAS OPERATING, MANA GING AND ADMINISTERING SEVERAL HOTELS ACROSS THE GLOBE SUCH AS CAIRO, COLOMBO, KATHMANDU, SINGAPORE ETC. ITS AGREEMENT WI TH HOTEL OBEROI IMPERIAL, SINGAPORE, WHICH IT WAS OPERATING FROM 02-11- 1970 WAS TERMINATED AND THE ASSESSEE RECEIVED A SUM OF RS. 29,47,500/- FROM THE RECEIVER OF THE SINGAPORE HOTE L. THE SUPREME COURT HELD THAT THE AMOUNT WAS RECEIVED BECAUSE TH E ASSESSEE HAD GIVE UP ITS RIGHTS TO PURCHASE OR OPERATE THE PROPE RTY AND THUS IT WAS A LOSS OF A SOURCE OF INCOME. THE RECEIPT WAS A CCORDINGLY HELD TO BE CAPITAL IN NATURE. IT WAS OBSERVED, AFTER A R EVIEW OF THE EARLIER CASES, THAT ORDINARILY COMPENSATION FOR LOS S OF OFFICE OR AGENCY IS TO BE REGARDED AS A CAPITAL RECEIPT AND T HE ONLY EXCEPTION WHERE THE PAYMENT RECEIVED FOR TERMINATION OF AN AG ENCY AGREEMENT COULD BE TREATED AS REVENUE WAS WHERE THE AGENCY WAS ONE OF MANY WHICH THE ASSESSEE HELD AND ITS TERMINA TION DID NOT IMPAIR THE PROFIT MAKING STRUCTURE OF THE ASSESSEE, BUT WAS WITHIN THE FRAMEWORK OF THE BUSINESS, IT BEING A NECESSARY INCIDENT OF THE BUSINESS THAT EXISTING AGENCIES MAY BE TERMINATED A ND FRESH AGENCIES MAY BE TAKEN. IT IS SOMEWHAT DIFFICULT TO CONCEIVE OF A PROFESSIONAL FIRM OF CHARTERED ACCOUNTANTS ENTERING INTO SUCH ARRANGEMENTS WITH INTERNATIONAL FIRMS OF CHARTERED ACCOUNTANTS, AS THE ASSESSEE IN THE PRESENT CASE HAD DONE, WITH THE SAME FREQUENCY AND REGULARITY WITH WHICH COMPANIES CARRYING ON BUS INESS TAKE AGENCIES, SIMULTANEOUSLY RUNNING THE RISK OF SUCH A GENCIES BEING TERMINATED WITH THE STRONG POSSIBILITY OF FRESH AGE NCIES BEING TAKEN. IN A FIRM OF CHARTERED ACCOUNTANT THERE COULD BE SE PARATE SOURCES OF PROFESSIONAL INCOME SUCH AS TAX WORK, AUDIT WORK , CERTIFICATION WORK, OPINION WORK AS ALSO REFERRED WORK. UNDER THE ARRANGEMENT WITH DHS THERE WAS A REGULAR INFLOW OR REFERRED WOR K FROM DHS THROUGH THE CALCUTTA FIRM IN RESPECT OF CLIENTS BA SED IN DELHI AND NEARBY AREAS. THERE IS NO EVIDENCE THAT THE ASSESSE E FIRM HAD ENTERED INTO SIMILAR ARRANGEMENTS WITH OTHER INTERN ATIONAL FIRMS OF CHARTERED ACCOUNTANTS. THE ARRANGEMENTS WITH DHS WA S A VOGUE ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 9 FOR A FAIRLY LONG PERIOD OF TIME 13 YEARS AND H AD REQUIRED A KIND OF PERMANENCY AS A SOURCE OF INCOME. WHEN THAT SOURCE WAS UNEXPECTEDLY TERMINATED, IT AMOUNTED TO THE IMPAIRM ENT OF THE PROFIT MAKING STRUCTURE OR APPARATUS OF THE ASSESSE E FIRM. IT IS FOR THAT LOSS OF THE SOURCE OF INCOME THAT THE COMPENSA TION WAS CALCULATED AND PAID TO THE ASSESSEE. THE COMPENSATI ON WAS THUS A SUBSTITUTE FOR THE SOURCE. IN OPINION, THE TRIBUNAL WAS WRONG IN TREATING THE RECEIPT AS BEING REVENUE IN NATURE 8. ON BEHALF OF THE REVENUE OUR ATTENTION WAS DRAWN TO ANOTHER JUDGEMENT OF THE SUPREME COURT IN CIT VS. B EST & CO. (P) LTD. 60 ITR 11. THIS JUDGMENT WAS RENDERED BY THE S AME BENCH WHICH HAD EARLIER RENDERED THE JUDGMENT IN KETTLEWE LL BULLEN & CO. LTD. (SUPRA). THE DECISION WAS HOWEVER IN FAVOU R OF THE REVENUE. THE EARLIER JUDGEMENT IN KETTLEWELL BULLEN & CO. LTD. (SUPRA) WAS REFERRED TO IN THE JUDGEMENT BUT THE SU PREME COURT OBSERVED THAT THE APPLICATION OF THE PRINCIPLE LAID DOWN IN KETTLEWELL BULLEN & CO. LTD. (SUPRA) MUST DEPEND ON THE FACTS OF EACH CASE. THEIR LORDSHIPS DISTINGUISHED THE FACTS AND HELD THAT IN THE CASE OF BEST & CO. (SUPRA), THE ASSESSEE HAD IN NUMERABLE AGENCIES IN DIFFERENT LINES AND IT ONLY GAVE UP ONE OF THEM AND CONTINUED TO DO BUSINESS WITHOUT ANY APPARENT MISHA P AND THAT THE CORRESPONDENCE SHOWED THAT THE ASSESSEE GAVE UP THE AGENCY WITHOUT ANY PROTEST PRESUMABLY BECAUSE SUCH TERMI NATION OF AGENCIES WAS PART OF THE NORMAL COURSE OF ITS BUSIN ESS. IT WAS ON ACCOUNT OF THIS DISTINCTION THAT THE ULTIMATE DECI SION WENT IN FAVOUR OF THE REVENUE. THE FACTS OF THE CASE BEFORE US, AS NOTED EARLIER, ARE NOT IN PARI MATERIA WITH THOSE IN BEST & CO. (P) LT D. (SUPRA). IN OUR VIEW THE FACTS ARE MORE AKIN TO THE CASE OF KET TLEWELL BULLEN & CO. LTD. (SUPRA) AND THEREFORE, THE RATIO LAID DOWN IN THAT CASE IS MORE APPROPRIATE TO BE APPLIED TO THE PRESENT CASE. 9. IN THE RESULT, WE ANSWER THE SUBSTANTIAL QUESTIO N OF LAW BY HOLDING THAT THE AMOUNT OF RS. 1,15,70,000/- RECEIVED BY THE A IN TERMS OF THE RELEASE AGREEMENT DATED 14-11-199 6 REPRESENTS A CAPITAL RECEIPT, NOT ASSESSABLE TO INCOME TAX. THE APPEAL OF THE ASSESSEE IS ALLOWED WITH NO ORDER AS TO COSTS. ITA NO. 225/JP/2016 SHRI MUNINDRA SINGH VS. ITO , WARD- 7(1), JAIPUR 10 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF KHANNA AND ANNADHANAM VS. CIT (SUPRA), I DO NOT CONCUR WITH THE ORDER OF THE LD. CIT(A). ON THE FACTS OF THE ASSESSEES CASE, THE DECISION OF HON'BLE DE LHI HIGH COURT IN THE CASE OF KHANNA AND ANNADHANAM VS. CIT (SUPRA) IS A PPLICABLE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED ORDER PRONOUNCED IN THE OPEN COURT ON 23 /11 /2016. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23 /11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MUNINDRA SINGH, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, 7(1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 225/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR