IAN PETER MORRIS Vs. ASSTT. COMMNR. OF INCOME TAX
LAWS(SC)-2016-11-92
SUPREME COURT OF INDIA
Decided on November 29,2016

IAN PETER MORRIS Appellant
VERSUS
Asstt. Commnr. Of Income Tax Respondents

JUDGEMENT

- (1.) Leave granted.
(2.) The appellant - Assessee along with three others had promoted a Company, namely, 'Log in Systems Innovations Private Limited' (the Acquiree Company) in the year 1990. The said Company was acquired by one Synergy Credit Corporation Limited (the Acquirer Company). The appellant was offered the position of Executive Director in the Acquirer Company for a gross compensation of Rs.1,77,200/- per annum. This was by appointment order dated 8th October, 1993. On 15th October, 1993, an Acquisition Agreement was executed between the Acquirer Company and the Acquiree Company on a going concern basis for a total consideration of Rs.6,00,000/-. On the same date i.e. 15th October, 1993, a Non-Compete Agreement was signed between the appellant - Assessee and the Acquirer Company imposing a restriction on the appellant from carrying on any business of Computer Software development and marketing for a period of five years for which the appellant - Assessee was paid a sum of Rs.21,00,000/-. The question that arose in the proceedings commencing with the Assessment Order is whether the aforesaid amount of Rs.21 lakhs is on account of 'salary' or the same is a 'capital receipt'. The High Court in the order under appeal took the view that the said amount is 'salary amount' on which interest would be chargeable/leviable under Section 234B and 234C of the Income Tax Act, 1961 (for short the Act ). Aggrieved, the present appeal has been filed.
(3.) A limited notice was issued in the present case confining the scrutiny of the Court to correctness of levy of interest as ordered/affirmed by the High Court. The aforesaid limited notice, therefore, has to be understood to have concluded the issue with regard to the nature of the receipt, namely, that the same was salary.;


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