Non-compete fee paid by an assessee was examined for...

Non-compete fee paid by an assessee was examined for classification as capital or revenue expenditure. The enduring benefit test was held non-determinative where the advantage is not in the capital field; since the payment only kept a potential competitor at bay, did not create a monopoly, did not result in acquisition of a new business, and did not add to the profit-making apparatus, it was held allowable as revenue expenditure under s. 37(1), and the contrary view was set aside. Interest on borrowed funds used to acquire shares in a subsidiary/associate to obtain controlling interest was held incurred for commercial expediency; interest deduction under s. 36(1)(iii) was allowed and the revenue's challenge dismissed. - SC