Non-Compete Fees paid for acquisition of business is Capital Expenditure – Delhi HC

Pitney Bowes India Pvt Ltd vs. CIT (Delhi High Court) – Assessee itself treated the expenditure as capital in the books of accounts. However, at the same time, it was maintained that since it was paid for loss of business that KOAL would suffer for non-compete fee, the same was treated as revenue in nature. Likewise, in Schedule 2 to the balance sheet disclosing ‘fixed assets’, payment of non‑compete fee is treated as ‘intangible assets’. This also shows that the assessee treats this as asset acquired, which is intangible in nature. The issue regarding forwarding of payment was...