Guffic Chem (P.) Ltd. v. CIT

332 ITR 602Supreme Court of India2011#1721 most cited

What is Guffic Chem (P.) Ltd. v. CIT authority for?

Compensation received for a non-compete covenant or for not carrying on a specific business activity is a capital receipt and not liable to tax as business income.

66

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2025.

Also referred to as

Guffic Chem (P.) Ltd. v. CIT · non-compete fee · capital receipt · not liable to tax · Section 28(va) · Section 37 · business income · restrictive covenant · intangible asset · depreciation on non-compete fee

Also reported as

10 Taxmann.com 105198 Taxmann 78

Sections most often in play

Section 143(3)Section 1961Section 37Section 135Section 144BSection 144C(10)Section 144C(13)Section 144C(5)
Read the full judgment

Issues it is cited on

section 28(va)non-compete feesection 41(4)depreciation on softwaresection 43(6)(c)section 2(13)section 43(6)section 28(i)section 28(iv)section 55(2)block of assetscommercial rights

Judgments citing Guffic Chem (P.) Ltd. v. CIT

DCIT 3(2), Mumbai vs. Lml Ltd, Mumbai

In the result, appeal of the revenue stands dismissed

ITA 3666/MUM/2011[2006-07]Status: DisposedITAT Mumbai21 Jun 2016AY 2006-07

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…by the Finance Act, 2002 w.e.f. 01.04.2003, therefore it cannot be applied retrospectively for the assessment year 2000-01. This precise issue had come up for consideration before the Hon’ble Supreme Court in the case of Guffichem vs. CIT, reported in [2011] 332 ITR 602, wherein, 25 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 the Hon’ble Supreme Court has answered the exact question in the following manner:- “5. The position in law is clear and well-settled. There is a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensat…

The ACIT RG-3(2) vs. M/S. Lml Ltd

In the result, appeal of the revenue stands dismissed

ITA 3668/MUM/2004[2000-2001]Status: DisposedITAT Mumbai21 Jun 2016AY 2000-2001

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…by the Finance Act, 2002 w.e.f. 01.04.2003, therefore it cannot be applied retrospectively for the assessment year 2000-01. This precise issue had come up for consideration before the Hon’ble Supreme Court in the case of Guffichem vs. CIT, reported in [2011] 332 ITR 602, wherein, 25 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 the Hon’ble Supreme Court has answered the exact question in the following manner:- “5. The position in law is clear and well-settled. There is a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensat…

M/S. Lml Ltd., Mumbai vs. The Addl CIT RG.3(2)

In the result, appeal of the revenue stands dismissed

ITA 3540/MUM/2004[2000-2001]Status: DisposedITAT Mumbai21 Jun 2016AY 2000-2001

Bench: Shri G S Pannu & Shri Amit Shukla

Section 143(3)

…by the Finance Act, 2002 w.e.f. 01.04.2003, therefore it cannot be applied retrospectively for the assessment year 2000-01. This precise issue had come up for consideration before the Hon’ble Supreme Court in the case of Guffichem vs. CIT, reported in [2011] 332 ITR 602, wherein, 25 M/s LML Ltd ITA No. :3668/Mum/2004 ITA No. : 3540/Mum/2004 ITA No. : 3666/Mum/2011 the Hon’ble Supreme Court has answered the exact question in the following manner:- “5. The position in law is clear and well-settled. There is a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensat…

M/S Trans Global Plc( Early Known As Moran Holdings Plc), Kolkata vs. D, I, T (It) 3(1), Kolkata

In the result, appeal of assessee is allowed

ITA 943/KOL/2013[2008-09]Status: DisposedITAT Kolkata15 Mar 2016AY 2008-09

Bench: Shri Mahavir Singh, Jm & Shri M. Balaganesh, Am]

For Appellant: Sri R. N. Bajoria, Advocate & Sri A. K. Gupta, FCAFor Respondent: N o n e
Section 143(3)Section 263Section 28Section 55(2)(a)

…receipt. This sum of capital receipt is required to be charged to tax under the head 'income from Capital Gains'. Support for the above contention is drawn from the judgement of the Hon'ble Supreme Court of India in the case of Gufic Chem P. Ltd. reported in 332 ITR 602 [2011], wherein the Apex Court has held that payments received as non-competition fee under a negative covenant is in the nature of capital receipts. 6. The above mentioned amount of Rs.6,05,25,000/- is therefore taxable under the head capital gains inasmuch as the cost of acquisition of such right to carry on any business or right to manufacture…

The Commissioner of Income Tax vs. Hcl Infosystems Ltd

ITA/167/2003HC Delhi21 Dec 2015
Section 260A

…ed with effect from 1st April 2003. 36. That the above amendments were intended to be prospective, since there is nothing to the contrary stated therein, is fairly well settled. The decisions in Guffic Chem. P. Ltd. v. Commissioner of Income Tax (2011) 332 ITR 602 (SC) and Commissioner of Income Tax v. Vatika Township P. Ltd. (2014) 367 ITR 466 (SC) are illustrative of this legal position. 2015:DHC:10384-DB ITA 167/2003 Page 18 of 21 37. This has also to be viewed in the context of the corresponding amendments to Section 28 of the Act as far as the consideration received b…

Satya Sheel Khosla, New Delhi vs. ITO, New Delhi

The appeal is allowed

ITA 882/DEL/2015[2010-11]Status: DisposedITAT Delhi10 Nov 2015AY 2010-11

Bench: Shri I.C. Sudhir & Shri O.P. Kant Assessment Year: 2010-11 Satya Sheel Khosla, Vs. Income-Tax Officer, Villa-D, Empire Estate, Ward-24(3), Sultanpur, Mehrauli, Gurgaon Rd., New Delhi. New Delhi. (Pan: Aampk0236G) (Appellant) (Respondent) Appellant By: S/Shri C.S. Aggarwal & Gautam Jain, Adv. Respondent By: Shri Surjit Kumar, Dr

For Appellant: S/Shri C.S. Aggarwal & Gautam JainFor Respondent: Shri Surjit Kumar, DR
Section 17(3)Section 28

…der whether the amount received by the appellant falls under sub-clause (a) of clause (va) of section 28 of the Income-tax Act. We find that the following observations of the Supreme Court of India in Guffic Chem. P. Ltd. vs. Commissioner of Income-tax (2011) 332 ITR 602 at page 607 support the views expressed by Shri Bhardwaj and the contention of Shri Aggarwal that the amendment made by the Finance Act, 2002 was intended to bring non-competition fee within the ambit of taxation:- “Payment received as non-competition fee under a negative covenant was always treated as capital receipt till the assessment year 20…