Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2017 (6) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (6) TMI 524 - SUPREME COURTTechnical fee/ royalty payable in five equal installments on yearly basis to be treated as revenue expenditure or capital expenditure - Held that:- There was no existing business which needed to be improvised with the aid of technical know-how - Royalty was not only for running the business but for bringing the business into existenc - whenever a complete new plant with a complete new process, with new technology is brought into existence, payment for such technical know-how is to be treated as capital expenditure - purpose of Agreement between the two companies was to set up a joint venture company with aim and objective to establish a unit for manufacture of automobiles and part thereof - this technical collaboration included not only transfer of technical information, but, complete assistance for establishment of plant, machinery etc. so as to bring in existence manufacturing unit for the products - the Agreement in question was crucial for setting up of the plant project in question for manufacturing of the goods, the expenditure in the form of royalty paid would be in the nature of capital expenditure and not revenue expenditure - Decided against the assessee
|