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TMI Blog2022 (3) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... vember, 2010, Petitioner has explained why the non-compete fee paid should be treated as revenue expenditure and not capital expenditure and has also relied on various decisions of High Courts to justify its stand. AO was satisfied with the explanation of Petitioner and decided to allow non-compete fee paid to be treated as revenue expenditure. Just because it has not been discussed in the Assessment Order, it does not mean that the issue was not a subject of consideration during assessment proceedings. As held by this Court in the case of Aroni Commercials Ltd . [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] it is not necessary that an Assessment Order should contain reference and/or discussion to disclose its satisfaction in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejoinder. 3. We have heard the learned Counsel and also considered the pleadings. 4. Petitioner is engaged in the business of manufacturing, selling of paints and undertaking works contract for exterior paints during the Assessment Year 2008-09. Petitioner executed a business purchase agreement dated 8th February, 2007 with Nitco Paints Private Limited (NPPL) to acquire the paints and coatings business of NPPL on slump sale basis. The business purchase agreement provided for non-compete arrangement between Petitioner and Nitco Tiles Limited by which, Nitco Tiles Limited agreed not to carry on competitive business for a period of five years in the specified territories from the date on which the business purchase agreement was consumm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Plaints (I) Pvt. Ltd. A. Y. 2008-09, PAN: AAKCS2902A Reasons for re-opening assessment u/s. 147 of the I. T. Act, 1961. In the return of income, the assessee has claimed full deduction of ₹ 23,50,10,000/- towards non-compete fee paid to M/s. NITCO Paints Pvt. Ltd. in the previous year while taking over their paints and coating business. In the books of accounts, the assessee had amortized the same over a period of five years. The Hon ble ITAT special bench, New Delhi in its recent order dated 30.07.2010 delivered in the case of Tecumseh India Pvt. Ltd. Vs. Addl. C. T. in ITA No.3759/Del/2003 (2010, 6 Taxman.com 69, New Delhi SB) held that amount paid for non-compete fee rights while acquiring a business is a capital expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted a detailed explanation vide a letter dated 30th November, 2010 as to why non-compete fee paid by Petitioner should be treated as revenue expenditure. In the said letter, Petitioner has also listed various decisions of the different High Courts that have taken a view that payment of non-compete fee was a business expenditure and not a capital expenditure. Shri Pardiwalla, submitted that Assessment Order was passed on 30th November, 2010 and on the date the Assessment Order was passed, the decision of the Full Bench was available, the same having been delivered on 30th July, 2010. Shri Pardiwalla, submitted that Assessing Officer was supposed to be aware of the decision of the Full Bench of the Hon ble ITAT, New Delhi, but still did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs. As held by this Court in the case of Aroni Commercials Ltd., v/s. The Deputy Commissioner of Income Tax Another (2)(1) 2014 (44) Taxmann. 304 (Bom), it is not necessary that an Assessment Order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. During assessment proceedings, once query is raised and the assessee has replied to it, it follows that the query raised raised was a subject of consideration of the Assessing Officer while completing the assessment. Paragraph 14 of the said decision reads as under:- 14:- We find that during the assessment proceedings the petitioner had by a letter dated 9 July 2010 pointed out that they were engaged in the business of financing tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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