In Brief
Ian Peter Morris was paid Rs. 21 lakhs by Synergy Credit Corporation Limited under a Non-Compete Agreement, which restricted him from carrying on computer software business for five years. The revenue authorities treated this as salary and levied interest under Sections 234B and 234C of the Income Tax Act. The Supreme Court held that where a receipt is characterized as salary, the advance tax provisions do not apply, and therefore no interest under Sections 234B and 234C can be charged. The Court allowed the appeal and set aside the High Court's order regarding interest liability.
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