Income Tax--Depreciation
Depreciation on Non-Compete Fee Treating the Same as an Intangible Asset
Akhilesh Kumar Sah
According to Section 32(1) of the Income Tax Act, 1961 (Hereinafter referred, in short, as the Act) w.e.f. 1-04-1998 depreciation is allowable on intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature being owned, wholly or partly, by the assessee and used for the purposes of the business or profession. In the case of DCIT v. Compass Group (India) Support Services P. Ltd. and vice-versa [(ITA Nos. 3312 to 3314/CHNY/2018) ITAT Chennai] decided on 12-6-2019 the issue was whether depreciation allowable on non-compete fees. The ITAT Chennai Bench held that the same is allowable.
1. Introduction
According to Section 32(1) of the Income Tax Act, 1961 (Hereinafter referred, in short, as the Act) w.e.f. 1-04-1998 depreciation is allowable on intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature being owned, wholly or partly, by the assessee and used for the purposes of the business or profession.