Depreciation allowed on Non-compete fee as it is a capital expenditure
The Relevant Text of the Order as follows :
Facts being identical, respectfully following the said decision, we hold that the assessee is entitled to depreciation on the non-compete fee. Thus, we sustain the order of the Ld. CIT(A) in treating the payments in the nature of non-compete fee and allowing depreciation. As the Tribunal in assessee’s own case has already held that the payments are in the nature of non-compete fee and entitled for depreciation the contentions raised by the assessee that it is in the nature of goodwill is only academic as submitted by the Ld. Counsel for the assessee. Since the ITAT held that the payments are non-compete fee and allowed depreciation the contention of the assessee in its appeal that it is non-compete fee is eligible for deduction U/s. 37 of the Act as revenue expenditure is rejected.