2018 (1) TMI 448

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....he CIT(A) has erred in deleting the addition of Rs. 4478750/- on account of disallowance of depreciation u/s 32 of the Act." 3. The facts shows that assessee is a company engaged in the business of wholesale trading in general and specialty chemicals. It filed its return of income on 29.11.2006 at a loss of Rs. 11261525/-. During the course of assessment proceedings it was noted that assessee has acquired running business from Nitrex Chemicals India Ltd and paid non compete fees of Rs. 35830000/- and claimed deprecation thereon @25% under the head "intangible assets". The claim of the assessee was rejected because assessee has debited 1/5 of non compete fees in profit and loss account as restriction is for period of five years. The claim....

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....t in case of CIT Vs. Ingersoll Rand International Ind. Ltd. ITA No. 452/2013 dated 30.06.2014, where above decision was considered. 6. We have carefully considered the rival contentions and also perused the orders of the lower authorities. Assessee is wholly owned subsidiary of EAS Industrial Ingredients PTE Ltd incorporated on 03.10.2005. It purchased the trading unit of Nitrex Chemicals for a total consideration of 244.06 million as a going concern on slump sale basis vide business transfer agreement dated 14.10.2005. According to the BTA the assessee has paid a non compete fee of 35.83 million for a period of five years included in above consideration. The assessee claimed Rs. 4478750 as depreciation on the above sum considering it as....