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2016 (6) TMI 103 - HC - Income TaxNon-competition fee paid - whether was revenue expenditure or capital expenditure? - Held that:- The non-competition agreement entered into by the assessee with M/s KHPL was to prevent K.Raghu Ramakrishna Raju from establishing a power plant in Andhra Pradesh for a period of three years. The agreement, in the present case, prevented Sri K.Raghu Ramakrishna Raju from establishing a power plant only for a period of three years from the date of the agreement. The restrictive covenant was neither permanent nor was the advantage derived by the assessee therefrom of an enduring nature. The Tribunal was, therefore, justified in holding that the assessee did not acquire any capital asset by making payment of a non-competition fee; and it merely eliminated competition in its business for a while thus to be treated as revenue expenditure - Decided in favour of assessee.
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