INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Non-compete fee paid by assessee whether brought in any capital assets -

Revenue challenged order passed by Tribunal that sum of Rs. 5 crores paid by assessee, was a revenue expenditure when Tribunal in its earlier order had not considered issue and assessee had withdrawn this ground before Tribunal as same was amortalized by assessee for a period of 36 months and only Rs. 1,25,00,000 was claimed during relevant assessment year. Held: Entire payment by assessee was allowable as revenue expenditure and not merely 1/4th of payment towards non-competition fee as it did not bring in any capital asset and payment was allowable under Section 37(1). Thus, Tribunal rightly directed AO to give appropriate relief after re-computing the income as per direction of Tribunal and modified order of the Tribunal to said extent. Thus, no error was found in Tribunal's order.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

SUBSCRIBE FOR FULL CONTENT

OR Try Reload the Page