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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM
आयकर अपील"य अ"धकरण, मुंबई "यायपीठ ‘ई ’ मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI "ी आर. सी. शमा", लेखा सद"य, एवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ ("नधा"रण वष" / Assessment Year: 2011-12) Shilpa Hemant Pradhan The Income tax Officer, Ward- बनाम/ 3(3), Room No.8, B Wing, 6th C-1101, Sunglow, Shreeji Ville Vs. Complex, Almeida Floor, Ashar I.T. Park, Road Road,Panchpakhadi, Thane No.16-Z, Wagle Indl. Estate, (W),Mumbai – 400 601. Thane-400 604. "थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AEYPP 2433 A .. (अपीलाथ" /Appellant) (""यथ" / Respondent) Assessee by: Shri M.C. Naniwadekar Department by: Shri Vikram Batra सुनवाई क" तार"ख / Date of Hearing: 07.09.2016 घोषणा क" तार"ख /Date of Pronouncement: 28.09.2016 आदेश / O R D E R PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 06.01.2015 passed by the Commissioner of Income Tax (Appeals) 2, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2011-12. 2. The assessee has raised the following grounds:-
A.Y. 2011-12 “1. The learned CIT(A) erred in confirming the action of the AO in bringing to tax the amount of Rs. 1 crore received by the assessee from M/s. Colorcon Asia Pvt. Ltd.
2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the said amounts constituted a revenue receipt in the hands of the assessee u/s.28(va) . He failed to appreciate that when the assessee was not carrying on any business at all in the relevant previous year, there could be no question of chargeability under the head 'profits and gains of business or profession', and s. 28(va) could have no application whatsoever.
3. The learned CIT(A) erred in failing to appreciate that the said receipt was a pure capital receipt and was not a revenue receipt and was not chargeable to tax. The orders of the learned CIT(A) and the learned AO are erroneous and contrary to the legal position.
4. The learned CIT(A) erred in relying upon the decision of Guffic Chem Pvt. Ltd. despite the same being distinguishable.”
3. The brief facts of the case are that the assessee filed its return of income on 30.07.2011 declaring total income to the tune of Rs.10,98,927/- for A.Y.2011-12. The return of income was processed u/s.143(1) of the Income Tax Act, 1961 ( in short “the Act”) on 18.03.2014. The return was selected for scrutiny under CASS and accordingly notice u/s.143(2) of the Act was issued by the ACIT, Circle, Thane on 13.09.2012 which was served upon the assessee on 20.01.2012. Thereafter the case was received by the present Assessing Officer by way of transfer. Subsequently notice u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee . The assessee was a director in M/s. Pharmaceutical Coatings Pvt. Ltd. (PCPL) and 2 A.Y. 2011-12 received the salary from the company. She was also getting pension from The New India assurance Co. The assessee was also deriving rental income as well as interest income from banks, post office and shares. During the course of scrutiny, it was found that the assessee had received an amount of Rs.1.00 crores from M/s. Colorcon Asia Pvt. Ltd. as Non- compete fee during the F.Y.2010-11. The assessee did not offer the said amount for taxation. Therefore after the issuance of notice, the AO brought the said amount to tax. Feeling aggrieved the assessee filed an appeal before the CIT(A) who dismissed the appeal. Therefore, the assessee has filed the present appeal before us.
ISSUE NO.1 TO 4:-
These issues are inter-connected therefore are being taken together for adjudication. However the above said four issues which have been raised before us, are in connection with upholding the order of the AO by the CIT(A) vide which the AO taxed the Non- compete fee to the tune of Rs.1.00 crores. The ld. Representative of the assessee was fair enough to admit the fact that this issue has been decided against the assessee in assessee’s husbands case (Hemant Prabhakar Pradhan) (in dt.13.07.2016 for AY 2011-12) having similar facts and circumstances. The ld. Departmental Representative has strongly placed reliance on the order passed by the CIT(A).Moreover on perusal of the order passed by CIT(A)-2 in question, we notice that the CIT(A) has placed reliance 3 A.Y. 2011-12 upon the decision of ITAT Mumbai Bench in the case of Aunrag Toshniwal vs. DCIT in (ITA No.7032 & 7034 (Mum) of 2012 , A.Y. 2010-11 dated 16.01.2013 wherein it was specifically held that Non- compete fee is liable to be taxed under business income u/s. 28(va). CIT(A) has also placed reliance on the law settled in the case of Giffic Chem Pvt. Ltd. vs. CIT (332 ITR 602)(2011). No distinguishable material has been placed on record to deviate the finding of the CIT(A) in question. Moreover, the case of the assessee has been fully covered by the case of her husband (Hemant Prabhakar Pradhan) (in ITA No. 6794/Mum/2014, dt.13.07.2016 for AY 2011-12) (supra). Therefore, in view of the above circumstances, we are of the view that CIT(A) has decided the matter of controversy judiciously and correctly which does not require to be interfered with at this appellate stage.