M/S INDITRADE CAPITAL LTD (PREVIOUSLY KNOWN AS ,KOCHI vs. THE ITO, CORPORATE WARD1(1),, KOCHI

ITA 241/COCH/2023Status: DisposedITAT Cochin14 May 2025AY 2013-14Bench: Shri Inturi Rama Rao (Accountant Member), Shri Sandeep Singh Karhail (Judicial Member)15 pages
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What did the Tribunal hold?

The Tribunal held that the non-compete right acquired by the assessee constitutes an intangible asset eligible for depreciation under Section 32(1)(ii) of the Income Tax Act. It followed the Madras High Court's view which distinguished the Delhi High Court's decision.

What were the facts?

The assessee claimed depreciation on non-compete fees paid to promoters. The Assessing Officer disallowed this claim, treating it as capital in nature and not eligible for depreciation. The CIT(A) upheld the disallowance, relying on Delhi High Court decisions.

What were the issues?

Whether depreciation is allowable on non-compete fees paid as consideration for acquiring a right that protects the assessee's business against competition.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

Hearing: 27.03.2025

Heard together (5 matters)

ITA No.239/Coch/2023
ITA No.240/Coch/2023
ITA No.241/Coch/2023
ITA No.242/Coch/2023
ITA No.243/Coch/2023

Read from the judgment's own cause title. This page is filed under one of them.

Per Inturi Rama Rao, AM : These are appeals filed by the assessee-company directed against different orders of the National Faceless Appeal Centre / Commissioner of Income-tax (Appeals) [“the CIT(A)”] for the assessment years 2011-2012, 2012-2013, 2013-2014, 2014-2015 and 2017-2018. 2 ITA No.239/Coch/2023 & Ors. M/s.Inditrade Capital Limited.

2.

For the sake of clarity and convenience, the facts rel

The order continues below.

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