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(1) From a perusal of records, it is noticed that the assessee has paid non-compete fees of Rs.5439.75 million to Mcorpglobal Communications Pvt. Ltd. (MCPL) and has claimed the same as a deduction in the computation of income. This capital expenditure remained to be disallowed in the assessment u/s.143(3) completed on 29.12.2011 Non-compete fee, being a capital expenditure, is not allowable as a deduction. The Hon'ble Delhi High Court in the case of Sharp Business System Vs. CTT-III (2012) 27 Taxmann.com 50 (Delhi) held that a company cannot use non-

M/s. Vodafone Idea Limited (Formerly known as Idea Cellular Ltd.) 5.2. The ld. AO on considering the aforesaid submissions together with the necessary documents submitted by the assessee along with various evidences had framed the assessment u/s.143(3) of the Act 29/12/2011 by accepting the plea of the assessee that the said non-compete fee would be eligible for deduction u/s. 37(1) of the Act. Even though no discussions had been made by the ld. AO in the assessment order framed u/s.143(3) of the Act, it is a fact that all the details that are relevant for adjudication on the allowability of non-compete fees were duly placed on record by the assessee before the ld. AO in the original scrutiny assessment proceedings itself. In the instant case, the reasons recorded by the ld. AO in respect of this issue is only on the aspect that the said sum of non-compete fee would be a capital expenditure, not allowable as deduction, by placing reliance on the decision of the Hon‟ble Delhi High Court in the case of Sharp Business System vs. CIT reported in 27 taxmann.com 50 (Del HC). This fact is very much evident from the reasons recorded by the ld. AO supra. It is pertinent to note that the decision of the Hon‟ble Delhi High Court in the case of Sharp Business Systems referred to supra was rendered on 05/11/2012. The assessment was framed u/s.143(3) of the Act on 29/12/2011. Hence, as on the date of framing of assessment u/s.143(3) of the Act, the decision relied upon by the ld. AO in the case of Sharp Business Systems supra was not available with the ld. AO.

5.3. In any case , it is evident from the reasons recorded, the ld. AO had merely stated "from perusal of records". This goes to prove that the ld. AO while recording the reasons had looked into the very same materials that were available with him in the assessment records and absolutely had no tangible material with him which would enable him to form a reasonable belief that income of the assessee had escaped M/s. Vodafone Idea Limited (Formerly known as Idea Cellular Ltd.) assessment, warranting reopening u/s.147 of the Act. This is a clear case of change of opinion of the ld. AO based on the decision of the Hon‟ble Delhi High Court in the case of Sharp Business System vs. CIT. The law is very well settled that even if the reopening is within four years from the end of the relevant assessment year in which the original assessment was framed, still the assessment cannot be reopened based on change of opinion of the ld. AO. Reliance in this regard is placed on the decision of the Hon‟ble Supreme Court in the case of Kelvinator of India Ltd reported in 320 ITR 561 (SC). Moreover, similar issue on merits of reopening was also subject matter of adjudication by the Hon‟ble Jurisdictional High Court in the case of Marico Ltd vs ACIT reported in 111 taxmann.com 253 (Bom). The Special Leave Petition (SLP) preferred by the Revenue against this decision, was dismissed by the Hon‟ble Supreme Court which is reported in 117 taxmann.com 244.

5.5. In the case of Sharp Business System relied upon by the ld. AO and the ld. DR, we find that nowhere in the said decision, even whisper is made that assessee had used the non-compete fees to lower its tax outgo, whereas strangely the ld. AO in the reasons recorded in respect of this issue had mentioned this expression that the Hon‟ble Delhi High Court had held that a company cannot use non-compete fee to lower its tax outgo. This itself goes to prove that the reasons recorded by the ld. AO in respect of this issue of non-compete fees is based on incorrect understanding of the decision of the Hon‟ble Delhi High Court and incorrect presentation of facts. In any event, this issue on merits , is covered by the decision of the Hon‟ble Jurisdictional High Court in the case of CIT vs. Everest Advertising Pvt. Ltd in Income Tax Appeal No.6539 of 2010 dated 04/12/2012 wherein it was dealing with the issue of non-compete fee for a period of three years. In the instant case before us also, the non-compete fee agreement is for a period of three years. The Hon‟ble Jurisdictional High Court had held non-compete fee as revenue expenditure.