Allowing the appeal of the assessee the Court held that payment of the non-compete fee, the assessee had not acquired any new business, nor was there an addition to the profit-making apparatus of the assessee. The assets remained the same. The expenditure incurred was essentially to keep a potential competitor out of the same business. Further, there was no complete elimination of competition. Such payment made by the assessee to L and T did not create a monopoly of the assessee over the business of electronic products and equipment. The payment was made to L and T only to ensure that the assessee operated the business more efficiently and profitably. Such payment made to L and T could not, therefore, be considered to be for the acquisition of any capital asset or towards bringing into existence a new profit-earning apparatus. That being the position, the payment made by the assessee to L and T as non-compete fee was an allowable revenue expenditure under section 37(1) of the Act.(AY 2001-02, 2002-03)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1): Business expenditure \u2013Capital or revenue-Advantage for enduring benefit-Non-compete fee \u2013No monopoly achieved-Allowable as revenue expenditure. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-60456","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fJ6","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=60456"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60456\/revisions"}],"predecessor-version":[{"id":60457,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/60456\/revisions\/60457"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=60456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=60456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=60456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}