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2016 (8) TMI 559 - HC - Income TaxNon-compete fees payment - whether an allowable business expenditure of revenue? - Held that:- In the present case, the “Non-compete fees” paid by the assessee company to the transferor company under an agreement where the transferor company shall not directly or indirectly manage, operate or have an interest in control or participate or compete against the assessee anywhere in the world for five years. Thus, the expenditure incurred primarily and essentially related to the non-competition of the transferor company against the assessee in the same business, which constituted the profit-earning apparatus of the assessee. Therefore, we are in complete agreement with the view taken by the Tribunal and it is held that the Tribunal was right in holding that the payment of ₹ 6 Crores made by the Assessee, as Non-compete fees, to VBC Industries Ltd. and other was an allowable business expenditure of revenue nature incurred by the assessee. The question posed for our consideration is answered in favour of the assessee
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