Home Highlights December 2011 Year 2011 This

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1. Non-compete fees - capital expenditure or revenue expenditure – warding off competition in business will constitute capital expenditure.... - HC

2. Non-compete fees - payment received as non-competition fee under a negative covenant is a capital receipt and not taxable under the Act. - HC

3. Non-compete fees paid by assessee were held to be revenue expenditure, deductible u/s 28(va) of Income Tax Act. Relying on Gujarat High Court's decision in Smartchem...

4. TP - Non compete fees - Estimation of income - assessee had signed non compete agreement - no justification for non payment of non compete fees to the assessee -...

5. Nature of payment of compensation in lieu of the non-compete agreement after retirement - whether non taxable in the hands of the assessee being a capital receipt -...

6. Non-compete fees paid - non-compete fee paid by the assessee did not create any capital assets, the same was revenue in nature- AT

7. Classification of services - non competition fee - activity of ‘entering into non-compete agreement is nothing but a service covered by ‘support service of business and commerce’

8. Disallowance of Non-Compete Compensation - Amount paid as non-compete fee being capital out lay, can not be allowed as revenue expenditure - AT

9. Disallowance of non-compete fees - Capital or revenue expenditure - expenditure has to be disallowed as capital expenditure - however depreciation to be allowed - AT

10. TDS u/s 194L - TDS on the payment of non-compete fee - non compete fee did not confer any exclusive right to carry-on the primary business activity. The right is...

11. Disallowance of depreciation u/s 32 - intangible assets - amount paid for non compete fees - non compete fee is not an eligible intangible asset as the words “similar...

12. Depreciation on the capitalised sum of non - compete fees - as non compete fee is not an asset, depreciation cannot be allowed - AT

13. Non-Compete fees - taxability - chargeable to tax as ‘business income’ - AT

14. Payment of non-compete fees - revenue expenditure or capital expenditure - agreement with the promoter of the Company to avoid immediate competition - same business...

15. Nature of expenditure - payment for non compete fee - the tenor of the agreement was only 18 months and it could not be stated that the assessee derived any enduring...