Non-Compete Fee Is Revenue Expenditure Under Section 37: Supreme Court

The Supreme Court held that non-compete fees paid under business arrangements qualify as revenue expenditure deductible under Section 37 of the Income Tax Act, provided they do not result in the acquisition of a capital asset or enduring benefit. The Court analysed the commercial context of non-compete agreements and clarified that such payments are often made to protect existing business interests rather than create new capital structures. The ruling resolves longstanding ambiguity in tax treatment of non-compete payments and provides clarity to taxpayers, corporates, and tax authorities regarding allowable deductions and commercial expediency under income tax law.