1997 (2) TMI 4 - SC - Income Tax

Collaboration agreement between the assessee & foreign company - Royalty - it is difficult to hold that the entire payment made is revenue expenditure merely because the payment is required to be made at a certain percentage of the rates of the gross turnover of the products of the assessee as royalty - Tribunal was right in holding that 25 per cent. of the amount paid by the assessee as royalty, was capital expenditure and, therefore, not allowable as a revenue expenditure