INTERNATIONAL SERVICES Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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S. Kannan, Accountant Member -
(1.) THESE three appeals were heard together and are disposed of by a common order.
(2.) The issue that arises for consideration in these cases is best appreciated against the backdrop of the material facts of the case. It is, therefore, necessary to look at the fact-situation.
Messrs Gordon Woodroffe Ltd. were earlier representing two U.K. firms, namely, M/s. Cazyer Irvine Co. Ltd. and M/s. Clan Line Steamers Ltd. At the relevant point of time, one C.D. Gopinath was functioning as a senior Director of M/s. Gordon Woodroffe Ltd. The aforesaid two foreign principals transferred their business connections to M/s. International Services, a firm consisting of three partners, namely, Smt. Comala Gopinath, wife of C.D. Gopinath, Mrs. Kamini Gopinath, daughter of C.D. Gopinath and Arvind Gopinath, son of C.D. Gopinath. Thereupon, M/s. Gordon Woodroffe Ltd. filed suit bearing C.S. No. 450 of 1977 and C.S. No. 26 of 1978 alleging, inter alia, that the said Gopinath had in a clandestine manner got hold of the business of the foreign principals and claiming, inter alia, liquidated damages. And by their order dated 30-4-1982, the High Court of Madras awarded to the plaintiff a sum of Rs. 42 lakhs as and by way of liquidated damages, together with interest thereon at the rate of 6 per cent per annum from the date of the order till the date of realisation.
(3.) THE said order predictably engendered further litigation, two significant aspects of which are noteworthy. First, on the interlocutory petition made by C.D. Gopinath and three others, the High Court of Madras, by their order dated 6-7-1982, stayed the operation of the judgment and Decree of the Original Side of the High Court dated 30-4-1982, on the following terms:
THEre will be stay as prayed for on condition that the petitioners in these petitions furnish bank guarantee for a sum of Rs. 42,00,000 (Forty two lakhs) within three months from this date to the satisfaction of the First Assistant Registrar, Original Side, High Court....
Secondly, on 28-10-1991, a Memorandum of Compromise was entered into by the parties to the dispute, under which the appellants-defendants paid a sum of Rs. 17 lakhs to M/s. Gordon Woodroffe Ltd. in full and final compromise settlement of the claims and counterclaims involved in the dispute. THEreupon, by their order dated 31-10-1991 (in O.S.A. Nos. 94 and 95 of 1982 and Cross Objections), the High Court of Madras, confirmed the said memo of compromise.;
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