Case Law Details
Brief: In this case the ITAT has held that the agreements entered into by the assessee, viewed together in their entirety, pertain to a single transaction of purchase of assets. Accordingly, the amount paid for non-compete fees was considered to be for acquisition of a business and capital in nature. The ITAT has also observed that each case would need to be decided in the background of its peculiar facts and circumstances. Thus, if the facts in another case are different (e.g. in the case of a continuing business) it may be possible to distinguish the ruling of the ITAT.
Citation : KEC International Ltd. Vs. Addl. CIT (ITA No. 4420/ Mum./ 2009)
Court : ITAT Mumbai
Backdrop
· As per section 32(1 )(ii) of the Income Tax Act, 1961 (ITA), a taxpayer is eligible to claim depreciation on know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets.
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