SBM CHEMICALS & INSTRUMENTS PRIVATE LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX 8(1)(2), MUMBAI

ITA 534/MUM/2018Status: DisposedITAT Mumbai15 September 2023AY 2013-1418 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the compensation received was for the transfer of goodwill, as stated in the settlement agreement. Therefore, the capital gains arising from this transaction were correctly offered to tax by the assessee.

What were the facts?

The assessee received compensation from a foreign company upon termination of an agreement. The assessee initially offered this amount as capital gains, claiming it was for goodwill. The Assessing Officer treated it as business income, and the CIT(A) upheld this view.

What were the issues?

Whether the compensation received on termination of an agreement is a capital receipt for goodwill or revenue receipt taxable as business income.

Which sections of the Income-tax Act were involved?

Section 45,Section 28(ii)(c),Section 143(3),Section 54EC

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Income Tax Appellate Tribunal, G BENCH, MUMBAI

Per Rahul Chaudhary, Judicial Member:

By way of the present appeal the Appellant has challenged the 1. order, dated 20/11/2017, passed by the Ld. Commissioner of Income Tax (Appeals)-14, [hereinafter referred to as ‘the CIT(A)’] for the Assessment Year 2013-14, whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 26/03/2016, passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

The Appellant has raised following grounds of

The order continues below.

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