Bhavnesh Saini, Judicial Member. - This appeal by the assessee is directed against the order of the CIT(A), Jammu, headquarters at Amritsar dated 11-12-2001 for the assessment year 1999-2000 on the following grounds :—

"1. That the ld. CIT(A), has erred in law and on facts of the case in rejecting the appeal of the assessee.

2. That the ld. CIT(A) has erred in law and on facts of the case in confirming the addition of Rs. 1,00,00,000.

3. That the provisions of section 28(ii)(a) are not applicable.

4. That the said amount was received as non-compete fee directly from Hindustan Coca Cola and the ld. CIT(A) has erred in rejecting the claim of the assessee that the said amount is not taxable, without there being any material on record.

5. That the assessment was a protective assessment and the ld. Assessing Officer is of the opinion that the same is assessable in the hands of Jammu Bottling Company Private Limited, a Company in which the assessee is a Director, and the matter is before the Hon’ble Tribunal.

6. That the addition of rupees one crore is, therefore, illegal, unjustified and its confirmation by the ld. CIT(A), was therefore not justified. It is prayed that the addition of Rs. 1 crore is deleted.

6A. That proper opportunity to plead the case was not allowed."

2. This appeal was earlier dismissed in default on two occasions but was restored to its original number vide different orders in the M.As.

3. We have heard the learned representatives of both the parties and gone through the observations of the authorities below.

4. The facts on the issue involved in appeal are that the assessee filed return of income on total income of Rs. 80,612. It was processed under section 143(1). Later on, it was selected for scrutiny. The Assessing Officer observed that the assessee had received a sum of Rs. 1 crore as non-compete fee from Hindustan Coca Cola Private Limited in terms of agreement dated 25-2-1999. The assessee is stated to be the Managing Director of M/s. Jammu Bottling Co. (P.) Ltd., Jammu. Salary received from this company had been declared in the return of income. Interest is also declared. As regards receipt of Rs. 1 crore statement was annexed with the return in which it was mentioned that the assessee has received a sum of Rs. 1 crore as non-compete fee from Hindustan Coca Cola Private Limited in terms of agreement dated 25-2-1999 as the same is exempt from tax in view of the decisions of the Hon’ble Supreme Court in CIT v. Best & Co. (P.) Ltd. [1966] 60 ITR 11, the Madras High Court in CIT v. Saraswathi Publicities [1981] 132 ITR 207 and Calcutta High Court in CIT v. Dunlop Rubber Co. (I) Ltd. [1977] 107 ITR 182. The assessee filed a copy of the agreement before the Assessing Officer. In reply before the Assessing Officer it was stated that the said company was franchise of M/s. Hindustan Coca Cola Pvt. Ltd. The business of the company alongwith its rights and goodwill was sold to M/s. Hindustan Coca Cola Pvt. Ltd. One of the conditions for the sale was that the Directors of Jammu Bottling Co. will not indulge in any business which is in any way in competition with the business of Hindustan Coca Cola Pvt. Ltd. An agreement to this effect was made between the assessee and M/s. Hindustan Coca Cola on 25-2-1999. The assessee had received a sum of Rs. 1 crore under the agreement dated 25-2-1999. This amount was deposited in the bank account of the assessee. The Assessing Officer noted the feature of the agreement dated 25-2-1999 between the assessee and M/s. Hindustan Coca Cola Bottling North West Pvt. Ltd. dated 25-2-1999 in the assessment order alongwith the brief feature of agreement being purchase of goodwill dated 6-8-1998 between the Hindustan Coca Cola Bottling North West Pvt. Ltd. and M/s. Jammu Bottling Company Pvt. Ltd. and business purchase agreement dated 7-12-1998 between M/s. Jammu Bottling Co. Pvt. Ltd. and M/s. Hindustan Coca Cola Pvt. Ltd. and observed the purpose of agreement dated 25-2-1999. The Assessi