ITAT Dissents & Allows Depreciation On Non-Compete Fee

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Fri, Jul 20, 2012 at 2:51 PM
Subject: Message from EGroup of SolapurCAs ITAT Dissents & Allows Depreciation On Non-Compete Fee
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

ACIT vs. GE Plastics India Ltd (ITAT Ahmedabad)

Non-Compete rights are an "intangible asset" eligible for depreciation

 

The assessee paid Rs. 4.55 crores to obtain a non-compete covenant from another company for a period of 10 years and claimed that the expenditure had resulted in an "intangible asset" u/s 32(1)(ii) on which depreciation was allowable. The AO rejected the claim though the CIT (A) allowed it. Before the Tribunal, the department relied on Srivatsan Surveyors (P) Ltd. vs. ITO 125 TTJ 286 (Chennai) where it was held that a non-compete right is a 'right in persona' and not a 'right in rem' and so depreciation was not allowable. HELD by the Tribunal dismissing the appeal:

(Click Here To Read More)

Regards,

Editor,

itatonline.org

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