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2020 (4) TMI 823 - AT - Income TaxNature of expenditure - treatment of non-compete fee - capital or revenue expenditure - assessee has raised that in case expenditure is held to be capital in nature then depreciation is to be allowed on the same - HELD THAT:- Payment of non-compete fee was capital expenditure in the hands of the assessee, on which the assessee is not entitled to claim depreciation u/s 32 of the Act. The Tribunal had relied on the decision of Jurisdictional High Court in the case of Sharp Business System vs CIT [2012 (11) TMI 324 - DELHI HIGH COURT] and applied the same. We decide both the main issues and alternate grounds against the assessee. Disallowance of expenses incurred on ice boxes provided to dealers - whether expenditure incurred towards ice boxes and dealer sign board provided to hawkers/dealers carrying on brand names of the assessee was capital in nature? - HELD THAT:- The assessee explained that since the product sold by it were to be sold on particular temperature, the ice boxes were used by the hawkers for selling the items at aforesaid temperature. As in CIT vs Honda Siel Power Products Ltd. [2007 (8) TMI 251 - DELHI HIGH COURT] while deciding the issue of advances made for ownership of tools and dies which remained with the manufacturer, had allowed the same as revenue expenditure as it facilitated the trading operations of the assessee. Despite the non-allowance of expenditure in Assessment Year 2002-03, the Assessing Officer himself has allowed the expenditure in Assessment Year 200-3-04,2004-05 and 2005-06. In the totality of the above said facts and circumstances and following the consistency approach, we are of the view that the expenditure incurred on ice boxes, merits to be allowed as deduction in the hands of the assessee. Hence, the claim of the assessee is allowed in entirety. - Decided in favour of assessee.
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