Non-compete Fees Paid pursuance to non-compete agreement not allowable as revenue expensiture – ITAT Delhi

Saraf Chemicals Ltd. Vs DCIT (ITAT Mumbai)- If the expenditure is made for the initial outlay or for the expansion of the business or a substantial replacement of the equipment, then it would fall under the capital expenditure. It was not an expenditure incurred while the business was being carried on. Though it had been the contention of the assessee that non-compete agreement was executed subsequent to the date of main agreement, yet such contention of the assessee could not be accepted as in the main agreement itself the non-compete agr

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