TMI Blog2022 (4) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... did not have the benefit of the ratio laid down by the Hon'ble jurisdictional High Court in case of Sharp Business System [ 2012 (11) TMI 324 - DELHI HIGH COURT] The reasoning of the Hon'ble jurisdictional High Court for coming to such conclusion is, unlike the rights mentioned in Section 32(1)(ii) which an owner can exercise against the world at large and can be traded or transferred, in case of non compete fee, the advantage is restricted only against the seller. Therefore, it is not a right in rem but in personem. We are conscious of the fact that some other non-jurisdictional High Courts have held that non compete fee is an intangible asset coming within the ambit of Section 32(1)(ii) of the Act and have allowed depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29.11.2014 declaring loss of ₹ 23,12,53,397. In course of assessment proceedings, assessing officer, while verifying the return of income filed by the assessee, noticed that the assessee has claimed deduction of ₹ 1,94,33,166, being depreciation on none complete fee. Being of the view that depreciation on non complete fee is not in the nature of an intangible asset as per Section 32(1)(ii) and explanation to the said section, the assessing officer called upon the assessee to show cause why the depreciation claimed should not be disallowed. Ultimately, the assessing officer completed the assessment disallowing the claim of depreciation by following the ratio laid down by the Hon'ble Delhi High Court in case of Sharp Busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid decision, the Hon'ble jurisdictional High Court, while dealing with identical dispute relating to allowability of depreciation on non compete fee, has held that non compete fee though is an intangible asset, however, it is not similar to know how, patent, copy right, their trademark, licenses, franchises or any other business or commercial right of similar nature. The reasoning of the Hon'ble jurisdictional High Court for coming to such conclusion is, unlike the rights mentioned in Section 32(1)(ii) which an owner can exercise against the world at large and can be traded or transferred, in case of non compete fee, the advantage is restricted only against the seller. Therefore, it is not a right in rem but in personem. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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