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)]