Arbitration Weekly Round-Up: 13th November To 19th November

Bombay High Court Amount Of Arbitration Award Received By Retiring Partner For Relinquishing Claim In The Firm Is Not Taxable: Bombay High Court Case Title: Ramona Pinto v. Deputy Commissioner of Income Tax, Income Tax Appeal No. 2610 of 2018 The High Court of Bombay has held that an amount of arbitration award received by a retiring partner for relinquishing its claim in the firm is not a taxable income. The bench of Justices K.R. Shriram and Dr. Neela Gokhale held that the amount received by a partner under a consent arbitration award for relinquishing its stake in the firm cannot be treated as an ‘income from other sources’ within the meaning of Section 56(1) of the Income Tax Act, 1961 to bring it within the rubric of taxable income. It held that to bring an amount within the fold of Section 56(1), it has to be first shown as income, however, an amount received upon retirement from a firm is not an income. It also held that such an amount also does not fall within the scope of ‘capital gains’. The Court also held that receipt of an amount in lieu of inheritance or pursuant to family arrangement cannot be charged with tax under the Act as arrangement is an agreement between the members of the same family for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family peace, honour, security and property of the family by avoiding litigation and amounts so received or not exigible to tax. Amount Received In Satisfaction Of The Inheritance Rights Is Not A Taxable Income: Bombay High Court Case Title: Ramona Pinto v. Deputy Commissioner of Income Tax, Income Tax Appeal No. 2610 of 2018 The High Court of Bombay has held that an An amount received in satisfaction of the inheritance rights is not a taxable income. The bench of Justices K.R. Shriram and Dr. Neela Gokhale held that receipt of an amount in lieu of inheritance or pursuant to family arrangement cannot be charged with tax under the Act as arrangement is an agreement between the members of the same family for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family peace, honour, security and property of the family by avoiding litigation and amounts so received or not exigible to tax. Delhi High Court No Separate Application Under Section 8 Of The A&C Act Is Required When The Objection Is Duly Raised In The Written Submissions: Delhi High Court Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019 The High Court of Delhi has held that once a party has duly taken objection to the jurisdiction of the Court to entertain the suit due to the presence of the arbitration clause between the parties in its written statement, it would be sufficient compliance of Section 8 of the A&C Act and there is no need for a separate application. The bench of Justice C. Hari Shankar held that once an arbitration clause has been extracted by a party in its written submission to object to the jurisdiction of the Court, the mere fact that the party did not separately request that the dispute between the parties be referred to arbitration, would be of little consequence. It held that once the arbitration clause had been extracted, it would be too hyper technical to hold that, for want of a separate request to refer the dispute between the parties to arbitration, there was no compliance with Section 8(1) of the 1996 Act. Continuing To Contest The Suit Does Not Waive The Right To Arbitration When A Section 8 Objection Was Raised In Written Submissions And Arguments: Delhi High Court. Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019 The High Court of Delhi has held that a party cannot be deemed to have waived off its right to arbitration merely because it continued to contest the suit when it had specifically raised objection to the maintainability of the suit due to the presence of the arbitration agreement. The bench of Justice C. Hari Shankar held that when a party takes a specific objection predicated on Section 8 in the application under Order XXXVII Rule 3(5) seeking leave to defend the suit and that objection, thereafter, is reiterated in the written statement and arguments. It cannot be said that the party has waived the right to arbitration. Section 8 Of A&C Objection Taken In Application For Grant Of Leave To Defend The Suit Cannot Be Considered Belated: Delhi High Court Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019 The High Court of Delhi has held that an objection regarding non-maintainability of the suit due to the presence of the arbitration agreement cannot be considered to be raised belatedly in terms of Section 8 of the A&C Act when it was taken in the application under Order XXXVII Rule 3(5) for grant of leave to defend the suit. The bench of Justice C. Hari Shankar held that in terms of Section 8 of ...

Arbitration Weekly Round-Up: 13th November To 19th November

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Arbitration Weekly Round-Up: 13th November To 19th November

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This is a premium content Available exclusively to Our subscribers

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