Tribunal allows appeal on ice boxes expenditure, dismisses non-compete fee as capital.

The Tribunal partly allowed the appeal, dismissing grounds related to the non-compete fee as capital expenditure but allowing the claim on expenditure for ice boxes provided to dealers, treating it as revenue expenditure.

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Issues:
1. Treatment of non-compete fee as capital expenditure.
2. Disallowance of expenditure incurred on ice boxes.

Analysis:

Issue 1: Treatment of non-compete fee as capital expenditure
The assessee claimed a deduction for non-compete fee paid to bottlers to prevent disclosure of confidential information and competition in their territories for five years. The Assessing Officer disallowed the claim, stating it was capital expenditure. The CIT(A) upheld this decision. The Tribunal referred to a previous case and held the non-compete fee as capital expenditure, denying depreciation under section 32 of the Income-tax Act. The Tribunal dismissed all grounds related to this issue, noting pending adjudication in the High Court.

Issue 2: Disallowance of expenditure on ice boxes
The Assessing Officer disallowed expenditure on ice boxes provided to dealers, considering it capital expenditure. The CIT(A) allowed this expenditure as revenue in a previous case. The Tribunal found a discrepancy in treatment of different types of expenditures. The assessee argued that since they did not own the ice boxes, the expenditure should be revenue. Referring to a High Court case, the Tribunal allowed the expenditure on ice boxes, noting consistency in allowing similar expenditures in previous years. Consequently, the Tribunal allowed the claim on ice boxes, stating it as revenue expenditure.

In conclusion, the Tribunal partly allowed the appeal, dismissing grounds related to the non-compete fee but allowing the claim on expenditure for ice boxes provided to dealers.

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