The AO passed order u/s. 143(3) and made additions on account of disallowance of non-compete fee. Held that, non-compete fees was paid to individuals who had experience in business of consultancy for not to engage themselves in similar kind of business and activities for a period of 3 years, these consideration was independent and not part of cost of acquisition of business paid to shareholders. Therefore, payment of non-compete fees was revenue in character and allowed as business expenditure. (AY. 2009-10)
Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2021) 189 ITD 329 (Kol.)(Trib.)
S. 37(1) : Business expenditure-Non-compete fees-Paid to individuals who had experience in business of consultancy for not to engage themselves in similar kind of business activities for a period of 3 years, such consideration was independent and not part of cost of acquisition of business, such fee was to be allowed as revenue expenditure.