Payment of non-compete fees for acquisition of business is capital expenditure

Court: Special Bench of Delhi Income-tax Appellate Tribunal Citation: Tecumseh India Pvt. Ltd. Vs. ACIT [2010-TIOL-408-ITAT-DEL-SE3] Brief : In a recent decision in the case of Tecumseh India Pvt. Ltd. Vs. ACIT [2010-TIOL-408-ITAT-DEL-SE3], the Special Bench of Delhi Income-tax Appellate Tribunal (the Tribunal) has held that non-compete fees inextricably linked with the acquisition of a business constitute capital expenditure. Facts Tecumseh Product Company Michigan (“Tecumseh USA”), a company incorporated in the USA and a leading manufacturer of compressors worldwide, entered int...