IN THE ITAT DELHI BENCH ‘G’
Assistant Commissioner of Income-tax, Circle 33(1), New Delhi
V/s.
Smt. Sangeeta Wij
IT Appeal No. 4274 (Delhi) of 2011
[Assessment Year 2008-09]
MAY 25, 2012
ORDER
A.D. Jain, Judicial Member
This is Department’s appeal for the assessment year 2008-09 against the order dated 29.6.2011 of the CIT(A)XXVI, New Delhi, contending that the ld. CIT(A) has erred in deleting the addition of Rs. 1,20,00,000/- received by the assessee as compensation, as business profit u/s 28(va) of the I.T. Act, since the assessee has been found to have received the said amount as compensation for not carrying on any business activity in relation to the business, which, as per the provisions of section 28(va), is chargeable as income under the head ‘profits and gains of business’.
2. The assessee, individual, during the year, was engaged in providing consultancy in Civil Engineering under the name and proprietorship of M/s. S.D. Engineering Consultants. This concern was taken over by ICT-SD Engineering Consultants Pvt. Limited w.e.f. 31.10.2007. The assessee also received salary from M/s. ICT-SD Engineering Consultants Pvt. Ltd. in the capacity of Director, income from capital gain and other sources.
3. The AO observed that during the year, the assessee had received a compensation of Rs. 1,20,00,000/- against the discontinuance of her proprietary business. It was observed that as per the copy of Agreement dated 4.12.2007 between IST-SD Engineering Consultants Pvt. Ltd. and Mrs. Sangeeta Wij (the assessee), proprietor of M/s. S.D. Engineering Consultants, the total enterprise value of the proprietary business of M/s. S.D. Engineering Consultants Pvt. Ltd. including good-will, empanelments, receivables, work in progress and all other rights and entitlements, as per the schedule attached, had been decided and determined at Rs. 1,20,00,000/-, as follows:-
