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TMI Blog2022 (2) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... intained. Only in respect of such of those issues where the expenditure could not be deducted the commissioner upheld the contention of the assessee. Revenue has not placed any material to show how this working would distort the allocable expenditure on the STP unit. Depreciation on Intellectual Property rights and Non-Compete fee treated as intangible assets - HELD THAT:- Second substantial question of law raised in this appeal has already been considered and decided by this Court in favour of the Assessee in the case of Pentasoft Technologies Ltd [ 2013 (11) TMI 1057 - MADRAS HIGH COURT] wherein as analysed the agreement and also in the previous portion of this order elaborated upon the various terms and conditions, which bind the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Section 32(1)(ii) of the Income Tax Act 1961 is valid? 3.Today, when the appeal is taken up for consideration, the learned counsel for the appellant/Revenue as well as respondent/assessee jointly submitted that the first question of law raised in this appeal has already been considered and decided by this Court in favour of the Assessee in the case of Commissioner of Income Tax Vs. Pentasoft Technologies Ltd. [TCA.Nos.72 73 of 2009, dated 22.10.2013] , the relevant passage of which, is usefully extracted hereunder: 14. As far as allocable expenditure is concerned, the Tribunal found that the Department had not questioned the accounts maintained for the two units, hence, the question of finding fault with the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a formula to be based on the turnover. The view of the officer is based on conjectures and surmises only and is not based on any materials. We reject this line of reasoning as a matter of mere opinion and mere surmises not backed up by any reason or material. 16. We may point out that the revenue does not dispute the fact that the major portion of the expenditure incurred by both the units are detectable from the accounts maintained. Only in respect of such of those issues where the expenditure could not be deducted the commissioner upheld the contention of the assessee. Revenue has not placed any material to show how this working would distort the allocable expenditure on the STP unit. 17. In these circumstances, the Tribunal had r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trengthen those rights transfer under the said composite agreement, there was a non compete clause by virtue of which, the transferor was restrained from using the same trade mark, copyrights etc., in favour of the assessee. Therefore, the non compete clause under the agreement should be read as a supporting clause to the transferor of the copy rights and patents rather to strengthen the commercial right, which was transferred in favour of the assessee. 22. Learned counsel for the assessee contended that the non-compete is in effect an indirect licence. However, we are not inclined to agree with the said submission since non compete, at best could be a commercial right because that right is relatable to the transfer of trade mark, copy r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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