Case Law Details
Abbott Healthcare Private Limited Vs ACIT (ITAT Mumbai)
Held that non-compete fees, being an intangible asset, paid in accordance with the terms of the agreement is eligible for depreciation u/s 32
Facts-
During assessment proceedings AO questioned assessee’s claim of depreciation on Non-compete Fee and disallowed claim of deprecation of Rs.128.38 crores on Non-compete Fee. The assessee carried the issue in appeal before the CIT(A). Before the CIT(A) the assessee made primary claim of depreciation on Non-compete Fee. The assessee also raised an alternate ground without prejudice to the primary contention that Non-compete Fee be treated as deferred revenue expenditure and the same should be allowed to be amortized over a period of eight years. The CIT(A) accepted assessee’s alternate prayer and directed the AO to treat Non-compete Fee as deferred revenue expenditure for a period of eight years. The Department assailed the findings of CIT (A) including the findings on non-compete fee in appeal before the Tribunal in ITA No.711/Mum/2018 (supra). The Tribunal vide order dated 06/01/2020 dismissed the ground raised by the Revenue assailing the relief allowed by CIT (A) on the issue of non-compete fee. Against the Tribunal order, the Department is in appeal before the Hon’ble High Court.
Conclusion-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
