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2018 (9) TMI 1543 - AT - Income TaxDisallowing the non-compete fees paid by the assessee to its holding company by holding it to be ‘capital expenditure’ - Held that:- This non-compete fees received by M/s. Kapil Chit Funds Private Limited was admitted as its income. The payments are to be made on yearly basis on the turnover of the appellant. Hence, total income was contended that the amount represents revenue item of expenditure. The view of the appellant was supported by the decision of the Hon’ble ITAT in the appellant’s own case for the Asst. Year 2012-13 which has been referred to supra. The Hon’ble ITAT, Hyderabad while deciding the appellant’s own case had stated that the payment made by the appellant to M/s. Kapil Chit Funds Private Limited was revenue expenditure as without the said payment the appellant could not have carried on its business more efficiently and profitably. Hence, the Hon’ble ITAT had held that the payment was revenue expenditure and allowable as a deduction u/s 37(1) of the Income Tax Act. Respectfully following the decision of the Hon’ble ITAT, Hyderabad in the appellant’s own case for the same issue of non-compete fee. - Decided against revenue.
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