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“depreciation on non-compete fee”

DepreciationSection 32(1)(ii)Section 32(1)(ii)55 judgments

The decision most relied on for depreciation on non-compete fee is Guffic Chem (P.) Ltd. v. CIT (332 ITR 602), cited in 66 judgments on BharatTax.

Leading authorities on depreciation on non-compete fee

Guffic Chem (P.) Ltd. v. CIT
332 ITR 602 · 2011 · Supreme Court
66
citing judgments

Compensation received for a non-compete covenant or for not carrying on a specific business activity is a capital receipt and not liable to tax as business income.

Pentasoft Technologies Ltd. v. DCIT
41 Taxmann.com 120 · 2014 · High Court
58
citing judgments

A non-compete fee paid as part of a business acquisition or transaction constitutes an intangible asset, eligible for depreciation under Section 32(1)(ii) of the Income-tax Act.

Sharp Business System v. CIT III
27 Taxmann.com 50 · 2012 · High Court
53
citing judgments

A non-compete fee, being a capital expenditure, is not allowable as a deduction from income and does not qualify for depreciation under Section 32(1)(ii) of the Income-tax Act, 1961.

Sharp Business System v. CIT
254 CTR 233 · 2012 · High Court
50
citing judgments

Depreciation is allowable on a non-compete fee as it constitutes an intangible asset, even if the right acquired cannot be transferred, provided it is treated as part of a block of assets.

Thiru Arooran Sugar Ltd. v. DCIT
350 ITR 324 · 2013 · High Court
44
citing judgments

A deduction for interest expense on borrowed funds used for interest-free advances to group companies is permissible only if the assessee establishes these advances were from surplus funds. The decision further clarifies eligibility for depreciation on intangible assets like non-compete fees, software, goodwill, and commercial rights under section 32(1)(ii), often arising from a slump sale.

CIT v. Ingersoll Rand International Ind. Ltd.
48 Taxmann.com 349 · 2014 · High Court
38
citing judgments

A payment for non-compete fees creates a commercial right and is considered an intangible asset eligible for depreciation under Section 32(1)(ii).

Assistant Commissioner of Income Tax v. Real Image Tech. (P) Ltd.
120 TTJ 983 · 2009 · ITAT
20
citing judgments

Depreciation is allowable on non-compete fees when a businessman pays another to restrain them from competing, as this constitutes an intangible asset.

Income Tax Officer v. Medicorp Technologies India Ltd.
122 TTJ 394 · 2009 · ITAT
20
citing judgments

Depreciation is not allowable on non-compete fees if they represent the acquisition of a business or commercial right, rather than an identifiable intangible asset.

Judgments citing depreciation on non-compete fee

M/S Inditrade Capital Ltd (Previously Known As, Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 239/COCH/2023[2011-12]Status: DisposedITAT Cochin14 May 2025AY 2011-12

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

No.239/Coch/2023 for assessment year 2011-2012 are stated hereunder. 3. The appellant raised the following grounds of appeal:- “1. Disallowance of depreciation on non-compete fee amounting to INR 93,75,000 1.1 On the facts and circumstances of the case and in law, the learned CIT(A) has erred ... hereinafter “the Act”) at a total loss of Rs.54,21,114. While doing so, the AO disallowed the claim for allowance of depreciation on non-compete fee of Rs.93,75,000. The factual backgrounds leading to the above addition are as under. 5. The appellant-company had entered into

Marico Ltd, Mumbai vs. DCIT Cen Cir-35, Mumbai

ITA 7044/MUM/2008[2005-2006]Status: DisposedITAT Mumbai11 Apr 2025AY 2005-2006

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

take a different view. Therefore respectfully following the above decision, we direct the AO to delete the disallowance made towards Miscellaneous Expenditure. Depreciation on Non-compete Fees 10. The assessee has acquired Trademark 'Meal Maker' from Plastomech during the Financial Year relevant to AY 2003-04. Along with the purchase

M/S. Marico Ltd, Mumbai vs. The ACIT Cen Cir-35, Mumbai

ITA 3533/MUM/2008[2004-2005]Status: DisposedITAT Mumbai11 Apr 2025AY 2004-2005

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

take a different view. Therefore respectfully following the above decision, we direct the AO to delete the disallowance made towards Miscellaneous Expenditure. Depreciation on Non-compete Fees 10. The assessee has acquired Trademark 'Meal Maker' from Plastomech during the Financial Year relevant to AY 2003-04. Along with the purchase

The ACIT CC-35, Mumbai vs. M/S. Marico Ltd, Mumbai

ITA 3152/MUM/2008[2004-2005]Status: DisposedITAT Mumbai11 Apr 2025AY 2004-2005

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

take a different view. Therefore respectfully following the above decision, we direct the AO to delete the disallowance made towards Miscellaneous Expenditure. Depreciation on Non-compete Fees 10. The assessee has acquired Trademark 'Meal Maker' from Plastomech during the Financial Year relevant to AY 2003-04. Along with the purchase

M/S. Indo National Limited, Chennai vs. ACIT, Corp Cricle -2(2). Chennai, Chennai

In the result, both the appeals of the assessee are partly allowed

ITA 1405/CHNY/2023[2016-17]Status: DisposedITAT Chennai19 Mar 2025AY 2016-17

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

Section 35

RealImage Tech (P) Ltd. and Indo Global Corporate Finance dealt the issueof d Indo Global Corporate Finance dealt the issueof depreciation on non-compete fee and not the nature of expenditure.The appellant compete fee and not the nature of expenditure.The appellant compete fee and not the nature of expenditure.The appellant

M/S. Indo National Limited, Chennai vs. ACIT Coprate Cricle-2(2), Chennai

In the result, both the appeals of the assessee are partly allowed

ITA 1404/CHNY/2023[2015-16]Status: DisposedITAT Chennai19 Mar 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

Section 35

RealImage Tech (P) Ltd. and Indo Global Corporate Finance dealt the issueof d Indo Global Corporate Finance dealt the issueof depreciation on non-compete fee and not the nature of expenditure.The appellant compete fee and not the nature of expenditure.The appellant compete fee and not the nature of expenditure.The appellant

Manju Dudala, Hyderabad vs. Income Tax Officer, Ward-11(3), Hyderabad

In the result, appeal ITA

ITA 665/HYD/2024[2017-18]Status: DisposedITAT Hyderabad08 Jan 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri V. Siva Kumar, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

after a discussion with the authorized representative, the Assessing Officer completed the assessment by making the additions on account of disallowance of depreciation on non-compete fee of Rs.9,44,78,811/-, (ii) disallowance of cost of production of TV serials and programmes which are claimed as revenue expenditure ... year 2011-2012 and 2012-2013 order dated 24.03.2016 wherein the Tribunal has directed the Assessing Officer to verify the issues of depreciation on non-compete fee and depreciation on Film Software Library and allowed the claim of assessee company on account of disallowance of cost of production

Metro Tyres Ltd, New Delhi vs. DCIT, Central Circle-5, New Delhi

ITA 4734/DEL/2017[2014-15]Status: DisposedITAT Delhi20 Dec 2024AY 2014-15

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S. Metro Tyres Ltd., New Delhi vs. DCIT, New Delhi

ITA 5966/DEL/2016[2013-14]Status: DisposedITAT Delhi20 Dec 2024AY 2013-14

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

DCIT, New Delhi vs. M/S. Metro Tyres Ltd., New Delhi

ITA 418/DEL/2016[2011-12]Status: DisposedITAT Delhi20 Dec 2024AY 2011-12

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S Metro Tyres Ltd, New Delhi vs. DCIT, New Delhi

ITA 379/DEL/2016[2012-13]Status: DisposedITAT Delhi20 Dec 2024AY 2012-13

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S Metro Tyres Ltd, New Delhi vs. DCIT, New Delhi

ITA 378/DEL/2016[2011-12]Status: DisposedITAT Delhi20 Dec 2024AY 2011-12

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

DCIT, New Delhi vs. M/S. Metro Tyres Ltd., New Delhi

ITA 5354/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Dec 2024AY 2010-11

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S. Metro Tyres Ltd., Delhi vs. DCIT, New Delhi

ITA 5041/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Dec 2024AY 2010-11

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S. Metro Tyres Ltd., Delhi vs. DCIT, New Delhi

ITA 5039/DEL/2015[2009-10]Status: DisposedITAT Delhi20 Dec 2024AY 2009-10

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S Metro Tyres Ltd., New Delhi vs. DCIT, New Delhi

ITA 5767/DEL/2013[2009-10]Status: DisposedITAT Delhi20 Dec 2024AY 2009-10

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S. Metro Tyres Ltd., New Delhi vs. DCIT, New Delhi

ITA 2266/DEL/2013[2008-09]Status: DisposedITAT Delhi20 Dec 2024AY 2008-09

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

M/S. Metro Tyres Ltd., New Delhi vs. Addl. CIT, New Delhi

ITA 1031/DEL/2013[2007-08]Status: DisposedITAT Delhi20 Dec 2024AY 2007-08

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 1031/Del/2013 : Asstt. Year : 2007-08 Metro Tyres Ltd., Vs Addl. Cit, 101, Jyoti Bhawan, Dr. Mukherjee Range-6, Nagar, Commercial Complex, New Delhi New Delhi-110009 (Appellant) (Respondent) Pan No. Aaacm3394A

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Ms. Jaya Chaudhary, CIT-DR
Section 1Section 14ASection 24Section 32(1)(ii)

evident to us during the course of hearing that this is not the first year of the assessee having claimed the impugned depreciation on non-compete fees as our attention is invited to the relevant non-compete agreement dated 24.10.2005 followed by the assessment records for the corresponding ... corresponding depreciation stood accepted in the preceding assessment years as under: 4. That only leaves us to deal with the question of depreciation on non-compete fee. We note that the issue of deprecation on non-compete fee is an issue which is no longer res integra and stands answered

DCIT, Chennai vs. Ab Mauri India Private Limited, Chennai

In the result, the appeal filed by the Revenue is partly-allowed

ITA 3318/CHNY/2018[2013-14]Status: DisposedITAT Chennai25 Nov 2024AY 2013-14

Bench: Hon’Ble Shri Manoj Kumar Aggarwal & Hon’Ble Shri Manu Kumar Giriआयकरअपील सं./ Ita No.3318/Chny/2018 (िनधा"रणवष" / Assessment Year: 2013-2014) The Deputy Commissioner Of Vs. M/S. A B Mauri India Private Ltd, Income Tax, Plot No.218 & 219 Bommasandra Corporate Circle 1(1) Jigani Link Road, Rajapura Hobli, Chennai 600 034. Jigani, Anekal Taluk. Bengaluru 560 105. [Pan:Aaeca 9923H ] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Ms. Kavitha, Irs, Addl. Cit. ""यथ" क" ओर से /Respondent By : Shri S P Chidambaram, Advocate सुनवाई क" तार"ख/Date Of Hearing : 20.11.2024 घोषणा क" तार"ख /Date Of Pronouncement : 25 .11.2024 आदेश / O R D E R Per Manu Kumar Giri ()

For Appellant: Ms. Kavitha, IRS, Addl. CITFor Respondent: Shri S P Chidambaram, Advocate
Section 129Section 143(2)Section 143(3)Section 32(1)(ii)

under: "2. In this ground, it has been contended by the assessee that the CIT(A) erred in confirming the disallowance of depreciation on non-compete fee of Rs.5,30,00,000/-. 3.We find that this issue is covered in favour of the assessee by the decision of ITAT, Chennai ... Therefore, respectfully following the ITAT Chennai Bench's decision in assessee own case for A.Y.2001-02 we hold that assessee is eligible for depreciation on non-compete fee. Accordingly, as far as ground regarding non-compete fee is concerned, the Revenue's Ground No.5 for A.Y.2010-11

Asst. Commissioner of Income Tax 8(2)(1), Mumbai, Ayakar Bhavan vs. Piramal Glass Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 1232/MUM/2024[2021-22]Status: DisposedITAT Mumbai27 Sept 2024AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2021-22 Asst. Cit-8(2)(1), Piramal Glass Pvt. Ltd., Room No. 481, Aayakar Bhavan, 6Th Floor, Piramal Tower Annexe Maharishi Karve Road, Vs. Ganpatrao Kadam Marg, Lower Mumbai-400020. Parel, Mumbai-400013. Pan No. Aabcg 0093 R Appellant Respondent

For Respondent: Mr. Ronak Doshi &
Section 36(1)(ii)

alternative ground that the depreciation on non raised an alternative ground that the depreciation on non raised an alternative ground that the depreciation on non-compete fees should be allowed @ 25% for intangible assets as ‘any other fees should be allowed @ 25% for intangible assets as ‘any other fees should ... appellant in decided the issue in favour of the appellant in AY 2001 AY 2001-02 and allowed depreciation on non allowed depreciation on non-compete fees @ 25%. Besides, the compete fees @ 25%. Besides, the appellant also relied upon the judicial pronouncement of the other appellant also relied upon