Suzuki India agreed to pay a sum of Rs. 1,32,00,000 to the appellant, in consideration of the appellant , who was managing director of joint venture company of Suzuki India for not providing "the benefit of his knowledge of regulatory matters, negotiating skills and strategic planning expertise to any other person in India in the two wheeler segment for a period of two years from the date of the Agreement". Held by ITAT Delhi in Satya Sheel Khosla NOVEMBER 10, 2015 [2015] 63 taxmann.com 293 (Delhi - Trib.) on issue 1. Whether amount is chargeable to tax under section 17(3) of the Income-tax Act, 1961 as "profits in lieu of salary". Held relyng upon Ram Prashad [1972] 86 ITR 122 Supreme Court page 126 that: "A servant acts under the direct control and supervision of his master. An agent, on the other hand, in the exercise of his work, is not subject to the direct control or supervision of the principal, though he is bound to exercise his authority in accordance with all lawful orders and instructions which may be given to him from time to time by his principal." Since following duties were assigned to managing director: "a. Managing all affairs of the company. b. Evolving business strategies and development. c. Advising management on various issues in relation to business of the company. d. Overlook the management of the company." The wide amplitude of the role assigned to the appellant clearly show that he was not subject to the direct control or supervision of Suzuki India, but was managing all affairs of the company; evolving business strategies; and advising the company. His role was clearly that of a joint venture partner in Suzuki India and not that of an employee of the company. In view of the foregoing and the submissions made by Shri Aggarwal, summarized in paragraphs 4 to 7 above, we are of Opinion that the appellant was not an employee of Suzuki India and, as such, the sum of Rs. 1,32,00,000 received by him from the company cannot be taxed as "profits in lieu of salary" under section 17(3) of the Act. 2. Further Clause (va) of section 28 of the Act taxes a sum received for a restrictive covenant in relation to a business, but not a profession. Compensation attributable to a negative/restrictive covenant is a capital receipt and as the same does not fall within the ambit of section 28(va), it is not taxable ITAT also mentioned (in Para 17 of Judgement) that observations in paragraph 28 on page 692 of Kanga and Palkhivala's "Law and Practice of Income-tax" that clause (va) of section 28 of the Income-tax Act "taxes a sum received for a restrictive covenant in relation to a business, but not a profession"; and, therefore, does not fall within the ambit of section 28(va).