ROHITASAVA CHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Assessee is aggrieved by an order dated 19th January, 2007 passed by the Income Tax Appellate Tribunal, Delhi Bench B in ITA No. 4713 (Del)/2003 relevant for the assessment year 2000-2001.

(2.) AFTER hearing learned counsel for the parties, we admit this appeal and frame the following substantial question of law for consideration: whether the Income Tax Appellate Tribunal was correct in law in holding that the non-compete fee received by the Assessee in terms of the agreement dated 4th december, 1997 was a capital receipt in the hands of the Assessee filing of paper books is dispensed with.

(3.) THE Assessee was a shareholder and a Director in a company called IIS infotech Ltd. He entered into two agreements dated 4th December, 1997 with F. I. Group Plc, U. K. (hereinafter referred to as the foreign company ). By one agreement, the Assessee agreed to sell all his shares in IIS Infotech Ltd. and by the other agreement, the Assessee agreed that till 31st May, 1999 he would not take up any business activity relating to software development in all the seven companies/organizations in which he was a director, major shareholder or a member since his expertise in the matter may adversely affect the business of the foreign company. For convenience, the second agreement is referred to as the non-compete agreement.