Depreciation claim on Non Compete Fee Allowable Under Income Tax Act: ITAT Deletes Penalty Imposed

The Income Tax Appellate Tribunal (ITAT) ruled that depreciation claims on non-compete fees are allowable under the Income Tax Act, thus deleting the penalty imposed on the appellant. The case involved a non-compete agreement, where the appellant had claimed depreciation on the non-compete fee as an intangible asset. The ITAT noted that non-compete fees, being commercial rights, are eligible for depreciation. The tribunal emphasized that the claim was made following legal provisions, and hence, the imposition of a penalty was unwarranted. This decision aligns with previous judicial precedents that recognized non-compete fees as intangible assets eligible for depreciation.