The Commissioner Of Income Tax v. Shri Srikishan Mohta

(-1-) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1291 OF 2008 The Commissioner of Income Tax...Appellant Vs. Shri Srikishan Mohta ..Respondent Ms. Anamika Malhotra, for the Appellant. Dr.K. Shivram with Mr. P.S. Savla, for the Respondent. CORAM: F.I. R.S.MOHITE, JJ. DATED: 5th January, 2009 P.C.: P.C.: . The Revenue had preferred this Appeal on the following questions:- (a) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is right in (i) Holding the re-opening of assessment as bad in law, being change of opinion, ignoring the fact that the receipt under consideration was incorrectly shown by the assessee in his return of income as not taxable and therefore the reopening u/s.147 of the I.T. Act, 1961 was proper. (ii) Upholding assessee’s contention regarding the receipt in question as a capital receipt allegedly received for (-2-) restrictive covenants, failing to appreciate the fact that, the assessee being the Managing Director of M/s.MSAS Global Logistic (India) Pvt. Ltd., and also a Director and substantial shareholder in M/s. Blue Skies (P) Ltd. was covered by the restrictive and non-competition covenant in view of the agreement dated 08.09.1999 which sufficiently prevented him for a period of 12 years from doing anything to the prejudice of the business interest of M/s.MSAS Global Logistic (India) Pvt. Ltd. The learned Tribunal in ITA No.6003/M/2006 was pleased to hold that the basis of belief for reopening is not correct. 2. On behalf of the assessee learned Counsel has placed before us the record which was also available with the Tribunal wherein the Assessing Officer had noted that the reassessment was sought to be done based on audit objection and that all the contentions which were raised had been considered and decided while making the order of assessment. The issue is squarely covered by the judgment of the Supreme Court in Commissioner of Income Tax Vs. Commissioner of Income Tax Vs.Lucas T.V.S. Ltd. 249 ITR 306. On a similar issue Lucas T.V.S. Ltd. 249 ITR 306. the Supreme Court held that opinion of audit party regarding application or interpretation of law was (-3-) not information based upon which proceedings for reassessment could be proceeded on. In the instant case all the information was available before the A.O. when he made the order of assessment. Considering the above, in our opinion,Question No.1 as framed would not arise. 3. Once the reassessment itself is bad Question No.2 would not survive. However, even in that case the learned Tribunal has referred to various judgments and the provisions of law as cited therein. In Commissioner of Income Tax Vs. Commissioner of Income Tax Vs.Narendra D. Desai, (2008) 214 CTR 190 this Court Narendra D. Desai, (2008) 214 CTR 190 had an occasion to consider similar issue. This Court took the view that the amount received under non-compete agreement, the receipt would be a capital receipt and not chargeable to tax. The Court further held that provisions of Section 28(va) which were made applicable with effect from 1st April, 2003 were not retrospective. The Parliamentary intent is thus clear that only after the amendment such receipts would be made taxable. In the light of that we do not find that the 2nd Question of law would arise from the order of the Tribunal. 4. In the light of the above, we find no merit in this Appeal which is accordingly dismissed. (-4-) (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.) (R.S.MOHITE, J.) (F.I.REBELLO, J.)