Depreciation allowed on payment of non-compete fee for business purpose

Mahindra Holidays & Resorts Ltd Vs DCIT (LTU) (ITAT Chennai)

ITAT Chennai held that depreciation towards payment as non-compete fee for purpose of business of assessee is duly allowable.

Facts- The assessment of the assessee was reopened u/s 147 of the Act. Two reasons for reopening were (1) Excess claim of depreciation for 15% on Electrical Fitting Capitalized, instead of 10%, (2) Treating of non-compete fee as an intangible asset and claimed depreciation @25%.

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