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Income Tax - Highlights / Catch Notes

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Depreciation disallowed on non-compete fee - an agreement not to ...

Income Tax

June 8, 2017

Depreciation disallowed on non-compete fee - an agreement not to compete is purely personal - cannot be considered as the intellectual property right - no depreciation - AT

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  1. Disallowance of non-compete fees - Capital or revenue expenditure - expenditure has to be disallowed as capital expenditure - however depreciation to be allowed - AT

  2. Depreciation on the capitalised sum of non - compete fees - as non compete fee is not an asset, depreciation cannot be allowed - AT

  3. Non-compete fee - Revenue v/s Capital - an agreement not to compete which is purely personal. - not eligible for depreciation u/s 32(1)(ii) - HC

  4. Depreciation on non-compete fee - treating the same as intangible asset u/s 32(1)(ii) – claim of depreciation allowed - AT

  5. Disallowance of depreciation on vehicle on the ground of personal use - Once the claim of depreciation on passenger vehicle is accepted by the AO then the depreciation...

  6. Classification of services - non competition fee - activity of ‘entering into non-compete agreement is nothing but a service covered by ‘support service of business and commerce’

  7. Non Competition Fee - expenditure claimed by the assessee in pursuance of non-compete agreement are capital expenditure-.... - AT

  8. Disallowance of depreciation is use of BMW car by the director of assessee - The car in question was a business asset and depreciation had to be allowed on the same. The...

  9. Intellectual Property Right Services - the transfer of right is absolutely in terms of the agreement, therefore, proviso Section 65(55)b) of the act are not applicable - AT

  10. Classification - Annual technical support fee - Consulting Engineers' Service or Intellectual property services (IPR) - not taxable as consulting engineer's service - AT

 

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