Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 1027 - ITAT DELHIRoyalty payment - treated as revenue expenditure or capital expenditure - Held that:- The assessee paid royalty @ 1% of the sales effected by it pursuant to an Agreement which was made on 27.12.2007. This Agreement, a copy of which is available on record, makes it clear that its duration is five years subject to further renewal. Clause 5.2 of the Agreement provides that it may be terminated at any time by mutual consent of the parties. Clause 2.1 of the Agreement makes it explicitly clear that it grants the assessee a non-exclusive right to use the trade mark and trade name in the licensed business. The above features deduced from the Agreement amply show that the character of royalty paid by the assessee to its Associated enterprise is nothing, but revenue. The Tribunal in several cases of the assessee’s group concerns has held such amount to be revenue in nature. - Decided in favour of assessee
|