THE COMMISSIONER OF INCOME TAX Vs. M/S. PARLE SOFT DRINKS PVT. LTD
LAWS(BOM)-2017-11-120
HIGH COURT OF BOMBAY
Decided on November 17,2017

THE COMMISSIONER OF INCOME TAX Appellant
VERSUS
M/S. Parle Soft Drinks Pvt. Ltd Respondents

JUDGEMENT

S. C. Dharmadhikari, J. - (1.) The Revenue has filed Income Tax Appeal No. 978 of 2014 challenging the order dated 20th September, 2013 of the Income Tax Appellate Tribunal, Bench at Mumbai. The assessment year is 1998-99.
(2.) The facts in brief are that the respondent assessee is a private company and during the relevant assessment year, it had shown income from the hire charges of vehicles and interest. During scrutiny of the return for assessment year 1998-99, the Assessing Officer noted that the company had received a sum of Rs.16.05 crores as compensation of a settlement for loss of its bottling rights with Coca Cola Company, USA. The company claimed the amount to be a capital receipt not liable to tax and was declared in the accounts as a capital reserve after deducting Rs.10 lakhs for professional fees paid.
(3.) The Assessing Officer, on scrutinising the agreement dated 18th September, 1993, noted that the payment was made for settlement of dispute between the Coca Cola Company, UAS and the respondent assessee. Accordingly, the amount partakes the character of income in terms of section 2(24) of the Act and to be taxed as income from other sources. As an alternate argument canvassed by the assessee that the amount was received as surrender of the right of first refusal for giving up the rights of setting up a bottling plant, the Assessing Officer noted that this right was assigned to Limca Flavours and Fragrances Ltd. (LFFL) and the respondent assessee was not in a position to show how it had acquired the rights. That is how the assessee's alternate argument was also rejected.;


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