Dismissing the appeal of the revenue the Court held that, rights acquired under a non-compete agreement gives enduring benefit & protects the assessee’s business against competition. The expression “or any other business or commercial rights of similar nature” used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include non-compete rights, hence eligible depreciation . Followed (2018) PCIT v. Ferromatic Milacron India (P) Ltd ( 2018) 99 Taxman.com 154 (Guj.)(HC) (ITA No. 556 of 2017, dt. 11.06.2019)
PCIT v. Piramal Glass Ltd. (Bom.)(HC), www.itatonline.org
S. 32 : Depreciation-Intangible asset-Non–compete fee-The expression “or any other business or commercial rights of similar nature” used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include non-compete rights – Eligible for depreciation. [S. 32(i(ii)]