Guffic Chem P.Ltd vs C.I.T,Belgaum & Anr

The Supreme Court held that a payment received under a non-competition agreement is classified as a capital receipt, not a revenue receipt, under the Income Tax Act, 1961. The Court distinguished between compensation for loss of agency, which is a revenue receipt, and compensation for a negative covenant, which is a capital receipt. The High Court's reversal of the Tribunal's decision was set aside, affirming the Tribunal's ruling that the `50 lakhs received by the assessee from Ranbaxy was not taxable.