Non-compete fees is capital receipt till A.Y. 2002-03: ITAT Mumbai

ACIT Vs Lyka Labs Ltd. (ITAT Mumbai) In the case of ACIT vs. Lyka Labs Ltd., the primary issue revolved around the tax treatment of a non-compete fee received by Lyka Labs Ltd. from its joint venture, Lyka Hetro Health Care Limited (LHHCL). The dispute spanned the Assessment Year (A.Y.) 2002-03 and involved differing interpretations between the Revenue and the assessee regarding whether the receipt should be treated as a revenue or capital receipt. Background and Facts Lyka Labs Ltd., engaged in pharmaceutical manufacturing, received a total sum of Rs. 49.8 crores from LHHCL under various head...