Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (7) TMI 1120 - HC - Income TaxOne-time lump sum payment made for acquiring technical know-how for a period of six years - capital or revenue expenditure - Held that:- The payment made by the assessee is on account of licence fee. By making such payment, the assessee has got a permission to use the technology. The money paid is irrecoverable. In case, the business of the assessee for some reason or the other is stopped, no benefit from such payment is likely to accrue to the assessee. The licence is not transferable. Therefore, it cannot be said with any amount of certainty that there has been an accretion to the capital asset of the assessee. In case, the assessee continues to do business and continues to exploit the technology for the agreed period of time, the assessee will be entitled to take the benefit thereof. But in case it does not do so, the payment made is irrecoverable. It is in this sense that the matter was looked into by the High Court of Madras and was endorsed by the apex court in the case of CIT v. I. A. E. C. (Pumps) Ltd. (1997 (4) TMI 14 - SUPREME Court ). The point as a matter of fact is covered by the aforesaid judgment wherein concluded that the entire payment constitutes revenue expenditure . Nothing really is left for us to do in the matter. - Decided in favour of the assessee.
|