Non compete fees for giving up right to carry on business is taxable as business income

As regard the provisions of sec.28(va), the Tribunal held that with the insertion of the said provisions w.e.f. 01.40.2003, receipts on account of giving up right to carry on business even if it is capital receipt would now be charged to tax as ‘income from business’. It was held that if the compensation is paid for ‘not carrying out any activity in relation to any business’ which the ‘transferor’ is not carrying on, the same would be chargeable u/s.28(va) of the Act. It was held that if the transferor is not already carrying on business then what he receives as non-compete fees is...