Chandrasekhar Balagopal, Trivandrum v. ACIT, Trivandrum

ITA 1309/COCH/2004 | 2000-2001
Pronouncement Date: 29-07-2011

Appeal Details

RSA Number 130921914 RSA 2004
Bench Cochin
Appeal Number ITA 1309/COCH/2004
Duration Of Justice 6 year(s) 7 month(s) 2 day(s)
Appellant Chandrasekhar Balagopal, Trivandrum
Respondent ACIT, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 29-07-2011
Assessment Year 2000-2001
Appeal Filed On 27-12-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.1309/COCH/2004 ASSESSMENT YEAR:2000-01 CHANDRASEKHAR BALAGOPAL P.B.NO.6105 1-2 JAWAHAR NAGAR KOWDIAR TRIVANDRUM. PA NO.ABXPC 6443C VS. THE ASST. COMMISSIONER OF INCOME-TAX CIR.1(1) TRIVANDRUM. (APPELLANT) ( RESPONDENT ) APPELLANT BY S/ SHRI D.ANAND & VIKRAM RESPONDENT BY SHRI S.R. SENAPATI SR.DR O R D E R PER N.VIJAYAKUMARAN J.M: THIS IS AN APPEAL BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2000-01. IT IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)I TRIVANDRUM DATED 06-12-2004. 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 2. THE LD. AUTHORITIES BELOW OUGHT TO HAVE FOUND T HAT THE AMOUNT RECEIVED BY THE APPELLANT WAS UNDER NON COMPETE AGREEMENT AND IT IS ONLY A CAPITAL RECEIPT AND NOT TAXABLE UNDER THE INCOME-TAX ACT. ITA NO.1309/COCH/2004 2 3. IT IS SUBMITTED THAT THE APPELLANT RECEIVED THE NON- COMPETE FEES ONLY FOR A RESTRICTIVE COVENANT WHICH BINDS HIM FROM ACCEPTING EMPLOYMENT AFTER TERMINATION OF HIS SERVICES WITH TERUMO PENPOL FOR A PERIOD OF LONG 5 YEARS. THIS IMPLIES IN CLEAR TERMS THAT THE NON- COMPETE FEE IS FOR A FUTURE RESTRICTION ON THE APPE LLANTS INCOME EARNING VOCATION AND NOT FOR CURRENT EMPLOYMENT. 4. IT IS SUBMITTED THAT AMENDMENT MADE FROM ASSESSMENT YEAR 2003-04 MAKES IT CLEAR THAT PRIOR T O 2003-04 THIS AMOUNT IS NOT TAXABLE. 3. THE ASSESSEE IS AN INDIVIDUAL. HE WAS THE MANA GING DIRECTOR OF A COMPANY M/S. PENINSULA POLYM ERS LTD . TRIVANDRUM. IT IS A CASE OF REOPENED ASSESSMENT. THIS REOPENING WAS UNDER CHALLENGE BEFORE INCOME-TAX APP ELLATE TRIBUNAL AND ON APPEAL TO THE HONBLE HIGH COURT T HEIR LORDSHIPS DECIDED THE ISSUE OF REOPENING IN FAVOUR OF THE REVENUE AND DIRECTED THE INCOME-TAX APPELLATE TRIBU NAL TO DECIDE THE APPEAL ON MERITS AS PER THE JUDGMENT DA TED 02- 04-2009 IN ITA NO.61 OF 2008(Y). 4. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A ND THE LD. DEPARTMENTAL REPRESENTATIVE SHRI S.R. SENAPATI SR. D.R. ITA NO.1309/COCH/2004 3 5. THE ISSUE IS ON THE TAXABILITY OF THE AMOUNT REC EIVED BY THE ASSESSEE FROM TERUMO CORPORATION. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL ( 2000- 01) M/S. PENINSULA POLYMERS LTD. WAS RESTRUCTURED AS PER MEMORANDUM OF UNDERSTANDING ENTERED INTO BETWEEN TH IS COMPANY AND TERUMO CORPORATION OF JAPAN AND MAJORIT Y OF THE SHARES OF M/S. PENINSULA POLYMERS LTD. WAS ACQU IRED BY M/S. TERUMO CORPORATION JAPAN. AS PART OF THE REST RUCTURING AN AGREEMENT WAS EXECUTED BETWEEN THE PROMOTERS VI Z. ASSESSEE AND SHRI C. PADAMAKUMAR OF M/S. PENINSULA POLYMERS LTD. (KNOWN AS PROMOTER GROUP) AND TERUMO CORPORATION. AS PER THE TERMS OF THE AGREEMENT N EITHER MEMBER OF THE PROMOTER GROUP WHETHER BY HIMSELF OR RELATIVES OR THROUGH ANYBODY CONTROLLED BY HIM SHAL L DIRECTLY OR INDIRECTLY CARRY ON OR TO BE ENGAGED IN BE EMPL OYED OR CONCERNED WITH OR INTERESTED IN OR ADVICE OF BECOME AFFILIATED WITH OR PERMIT HIS NAME TO BE USED BY A NY PERSON OR PERSONS FIRMS ASSOCIATIONS SYNDICATE COMPANY OR CORPORATION CARRYING ON OR ENGAGED IN ANY TRADE OR BUSINESS SIMILAR TO OR COMPETING WITH THE BUSINESS OF THE RE STRUCTURED COMPANY IN INDIA OR ABROAD. THE PROMOTER GROUP BY SIGNING THE AGREEMENT COMMITTED TO THE ABOVE TERMS AND COND ITIONS. IN CONSIDERATION OF THIS COMMITMENT OF THE PROMOTER GROUP ITA NO.1309/COCH/2004 4 THE TERUMO CORPORATION PAID ERROR: UNDEFINED OFFENDING COMMAND: RUPEE STACK: / INDIAN