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2018 (7) TMI 2148 - ITAT MUMBAIDepreciation on Goodwill and Non-compete Fees - Whether the consideration paid by the assessee included consideration towards restraining the seller to carry on a similar business for a period of 8 years - HELD THAT:- A payment made towards non-compete fees pursuant to a composite agreement, by virtue of which the transferor was restrained from the using same trade mark, copyright etc., has to be read as a supporting clause to transfer of copyright and patents transferred as intangible assets in terms of Sec. 32(1)(ii) of the Act. Our aforesaid view stands fortified by the judgment of the Hon‟ble High Court of Madras in the case of Pentasoft Technologies Ltd. Vs. DCIT [2013 (11) TMI 1057 - MADRAS HIGH COURT] as not being persuaded to subscribe to the claim of the revenue, had concluded that the payment made towards non- compete fees under an agreement should be read as a supporting clause to the transfer of the copyright and patents to strengthen the commercial right, which was transferred in favour of the buyers. The High Court holding that the assessee would be entitled for claim of depreciation under Sec.32(1)(ii) as regards the payment made towards non-compete fees pursuant to a composite agreement - Also see Ingersoll Rand International Ind Ltd.[2014 (6) TMI 934 - KARNATAKA HIGH COURT] - Decided against revenue.
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