Extinguishment of right to carry on business not amounts to transfer of capital asset

CIT Vs Max India Ltd. (Punjab & Haryana High Court) Conclusion: Non-compete fee received by assessee for signing of negative covenant for not carrying out a speciality business did not amount to transfer of right to carry on business, the consideration of which was liable to be taxed as capital gain. Held:  Assessee-company divested its shareholding in Max Atotech Limited to M/s Atotech BV, Netherlands for Rs. 58 crores. Alongwith the signing of the agreement for sale of shares, assessee had undertaken negative covenants of not entering into market of plating chemicals and processes for G...