In Brief
An assessee received compensation from his employer on condition he would not carry on a competing business. The Income-Tax authorities initially treated this as a revenue receipt, but the CIT(A) and Tribunal both found it was a capital receipt falling under Section 28(v-a) of the Income Tax Act. The High Court reversed this, treating it as a revenue receipt. The Supreme Court allowed the appeal, holding that compensation under a restrictive covenant (not to compete) is a capital receipt by law, distinct from compensation for loss of agency (which is revenue). The Court emphasized that concurrent findings by lower authorities must be respected and that the High Court's role depends on formulating proper questions of law.",
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