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2017 (12) TMI 131 - HC - Income TaxNature of expenditure - non-compete fee - revenue or capital expenditure - Held that:- The consideration of ₹ 70 lakhs was not expressly towards the non-compete obligation, but towards smoothening the process of acquisition of the asset, i.e., the unit of SML in Madras. Approvals that were required from the financial institutions, income tax authorities and other governmental authorities were towards the finalisation and closure of the acquisition process. Other covenants and obligations imposed upon SML, i.e., warranties, confidentiality, etc., added value to the asset being acquired. There is no doubt that in the facts of the present case, the payment of ₹ 70 lakhs is a capital expenditure and hence the question of law is answered in favour of the Revenue
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