Contract Act, 1872 ,
Section 27 , scope of-Whether a post-service restrictive
covenant in restraint of trade in service agreement between
the parties is void ... that all
post-service restrictions were void. His precise contention
was that even a post-service restrictive covenant, if it was
reasonable, qualified or limited
firm, goodwill of the firm and compensation for the restrictive covenant for five years and its quantification is reasonable on the facts found ... disallowed as capital expenditure and that an amount referable to the restrictive covenant agreed to by the parties should be allowed as a deduction
under subsequent change of law to enlarge the opera-
tion of restrictive covenant to claim absolute ownership in
the property bequeathed to her. But socio ... legatee under a testamentary disposition is bound
by the restrictive covenants contained therein. But distinc-
tion should be maintained between an ordinary legatee
Court set down the principles applicable to receipts on account of restrictive covenants as follows :
"It cannot seriously be disputed that compensation paid ... loss of agency but also for the assessee accepting a restrictive covenant for a specified period (five years , in that case ), that the restrictive covenant
multi-agency
concern-One of the agencies terminated with a restrictive
covenant not to carry on business--compensation, whether
capital or revenue receipt.
HEADNOTE ... termination of the agency business and as
consideration for the restrictive covenant not to do
business in the same line for a prescribed period
that it
is self imposed restriction on assessee and such deed
in legal parlance is treated as restrictive covenant.
There had been plethora ... assessee himself had agreed to impose
restrictions for not carrying on such trade and
business and such restrictive covenant will not be in
violation
Among the first few cases on the subject of a restrictive covenant or a non-compete agreement is the decision of the Supreme Court ... that case, the assessed was paid, as a result of a restrictive covenant, some compensation to refrain from selling or accepting any business which would
contracts.
3. The CIT (A) ought to have appreciated that the restrictive covenant is a ruse adopted by the assessee to reduce the incidence ... amount received in pursuance of non-compete agreement was for restrictive covenant and thus a capital receipt and that the amount towards sale of goodwill
motion. The Articles contained certain clauses in relation to the restrictive covenants of Ex.B. Ratanchand in the Articles said that to the best ... restrictions, no good offer is coming for the property. All offers previously made were withdrawn because of the said Municipal restrictions and the said covenants
that the amount in question was received for a restrictive covenant and thus not taxable.
14.5. Even otherwise, he submitted, the judgment ... assessee imposes a restriction on himself against conducting any trade in the same line of activity, it will be a restrictive covenant. He relied
