DCIT, Jaipur V. SATYAM FOOD SPECIALITIES P LTD. NOW KARMIC BUSINESS SPECIALITIES, NEW DELHI

ITA 577/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5271 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENA CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Capital asset; Business income; Capital receipt
• Section: 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 577/JP/1 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE DCIT, CENTRAL CIRCLE-2, JAIPUR CUKE VS. M/S SATYAM FOOD SPECIALITIES (P) LTD. (NOW KARMIC BUSINESS SPECIALITIES) 1517, DEVIKA TOWERS, NEHRU PLACE, NEW DELHI LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADCK 6335 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV..) JKTLO DH VKSJ LS@ REVENUE BY :S HRI M.S. MEENA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.05.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 25 /05/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), 4, JAIPUR DATED 20.03.2015 WHEREIN THE REV ENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY IGNORING THAT THE DEPARTMENT HAS CHALLENGED THE QUANTUM ORDER OF THE ITAT BEFORE THE HONBLE ITAT. ITA NO. 577/JP/15 DCIT, CC-2, JAIPUR VS. SATYAM FOOD SPECIALITIES (P ) LTD. NEW DELHI. 2 2. AT THE OUTSET, LD AR SUBMITTED THAT THE HONBLE ITA T IN ITA NO. 225/JP/2013 DATED 27.02.2015 FOR ASSESSMENT YEAR 20 09-10 IN THE ASSESSEES OWN CASE HAS DELETED THE QUANTUM ADDITIO NS AND IN LIGHT OF THAT, SUBJECT PENALTY PROCEEDINGS DOESNT SURVIV E AND SHOULD BE QUASHED. 3. THE COORDINATE BENCH IN ITA NO. 225/JP/2013 DATE D 27.02.2015 HAS HELD AS UNDER: ASSESSEE HAS VEHEMENTLY DENIED HAVING ANY WHERE ADMITTED THAT PART OF THE COMPENSATION WAS FOR NON COMPETITION. IN OUR CONSIDERED VIEW THE COMPENSATI ON IN QUESTION WAS MEANT, INTENDED AND PAID FOR WITHDRAWA L OF AFORESAID LITIGATION INSTITUTED BY ASSESSEE WHICH C OULD HAVE RESULTED IN MANY ADVERSE CONSEQUENCES FOR THE REPU TATION OF COCA COLA/ATLANTIC BESIDES ENTAILING HUGE COST AN D EFFORTS OF LITIGATION. RELINQUISHMENT OF RIGHT TO SUE IS NEIT HER A CAPITAL ASSET NOR TAXABLE U/S 28 WHICH PROVIDES SPECIFIC TY PES OF RECEIPT TO BE HELD TAXABLE AS BUSINESS INCOME. RELINQUISHM ENT OF RIGHT TO SUE DOES NOT FIND ANY MENTION THEREIN. IN THIS EVENTUALITY WE HAVE NO HESITATION TO HOLD THAT THE IMPUGNED AMOUNT OF RS. 8,16,22,040/- IS A CAPITAL RECEIPT NOT LIABLE TO IN COME TAX. THE ADDITION IS DELETED, ASSESSEES GROUNDS IN THIS BEH ALF ARE ALLOWED. 4. IN LIGHT OF FINDINGS OF THE COORDINATE BENCH IN QUANTUM PROCEEDINGS WHERE THE IMPUGNED AMOUNT OF RS. 8,16,2 2,040/- HAS ITA NO. 577/JP/15 DCIT, CC-2, JAIPUR VS. SATYAM FOOD SPECIALITIES (P ) LTD. NEW DELHI. 3 BEEN HELD TO BE CAPITAL RECEIPT NOT LIABLE TO TAX, CONSEQUENT LEVY OF PENALTY THEREON DOESNT SURVIVE. IN LIGHT OF THAT , LEVY OF PENALTY HAS BEEN RIGHTLY DELETED BY LD CIT(A) WHO HAS CONSIDERE D THE DECISION OF THE COORDINATE BENCH (SUPRA). HENCE, GROUND OF APP EAL OF REVENUE IS DISMISSED. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 /0 5/2016. SD/- SD/- ( R.P. TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 25/05 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CC-2, JAIPUR 2. THE RESPONDENT- M/S SATYAM FOOD SPECIALITIES (P ) LTD., NEW DELHI 3. THE CIT(A) 4. JAIPUR 4. THE CIT-CENTRAL, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 577 /JP/15 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR