Compensation attributable to a negative/restrictive covenant is a capital receipt : SC

Shiv Raj Gupta Vs CIT (Supreme Court)

The Apex Court in the case of Shiv​ Raj Gupta v. CIT¹ held that the compensation attributable to a negative/restrictive covenant is a capital receipt. The Apex Court reiterated that the test of commercial expediency would have to be adjudged from the point of view of the businessman and not of the Income Tax Department.

The Apex Court further held that the High Court’s jurisdicti

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