9911796707
TMI Blog2015 (8) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation on the non-compete rights. 4. Rival contentions have been heard and record perused. Facts of the case in brief are that the assessee company was incorporated in 1997 as a private limited company under the Companies Act, 1956 with the objective to market and distribute the products of the Vossloh Group in India. The assessee company entered into a non-compete agreement with Mr. Shekhar Shah to prevent him from starting a business in India in completion with that of assessee company in India. As per the non-compete fee agreement the assessee company not only prevented Mr. Shekhar Shah from carrying on competetitive business but also employed him for carrying on its business. Thus the assessee company had not only obtained a restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Karnataka High Court in the case of CIT vs. Ingersoll Rand International Ind. Ltd wherein the Hon'ble held as under:- "What is to be seen is, what are the nature of intangible assets which would constitute business or commercial rights to be eligible for depreciation. In this regard, it is necessary to notice that the intangible assets enumerated in section 32 effectively confer a right upon an assessee for carrying on a business more efficiently by utilizing an available knowledge or by carrying on a business to the exclusion of another assessee. A non-compete right encompasses a right under which one person is prohibited from competing in business with another for a stipulated period. It would be the right of the person to carry on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the same trade mark, copyrights, etc. Therefore, the non compete clause under agreement should be read as a supporting clause to the transferor of the copy rights and patents rather to strengthen the commercial right, which was transferred in favour of the assessee. Rejected the argument of revenue that non-compete fee is in the nature of a negative right and it cannot be of a commercial right of similar nature and the expression 'similar nature' shall be relatable to patents, copy rights and trade mark licence or franchise or any other business." 8. We find that this issue is also covered by the decision of co-ordinate Bench of this Tribunal in the case of Ind Global Corporate Finance (P.) Ltd. vs. ITO, 19 ITR (T) 483 (Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
