Case Law Details
Hindustan Coca-Cola Beverages Pvt. Ltd. Vs DCIT (ITAT Delhi)
In the given case, the assessee had claimed deduction as non-compete fee amortized. The assessee explained that during the year under consideration, it had acquired running business of various bottlers directly or through amalgamation. The non-compete fee was paid to the bottlers for not disclosing the confidential information relating to the business and for not competing in similar line of business in their respective territories for a period of five years. The assessee followed practice of charging amounts to P&L A/c on a pro-rata basis to be fully written off over the period of benefit. The Assessing Officer relying on the assessment order for Assessment Year 1999-2000 disallowed the claim of the assessee on the ground that it was an item of capital expenditure. The CIT(A) had upheld the said addition in Assessment Year 1999-2000.
ITAT uphold the order of the CIT(A) and hold that the payment of non-compete fee was capital expenditure in the hands of the assessee, on which the assessee is not entitled to claim depreciation u/s 32 of the Act. The Tribunal had relied on the decision of Jurisdictional High Court in the case of Sharp Business System vs CIT (supra) and applied the same. ITAT decide both the main issues and alternate grounds against the assessee. Admittedly the Hon’ble High Court in assessee’s own case has admitted the issues for adjudication and the same are pending. Thus, this ground raised by the assessee are dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by assessee is against order of CIT(A)-4, New Delhi dated 30.03.2015 relating to assessment year 2001-02 against the order passed under section 143(3) of the Income-tax Act, 1961 (in short ‘the Act’).
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