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2015 (6) TMI 999 - AT - Income TaxDisallowance of royalty - revenue v/s capital expenditure - Held that:- From this agreement, the following facts emerge:- (i) The royalty is paid @ 5% on domestic sales and 8% on export sales. (ii) Thus, the royalty payment is directly linked to revenue. (iii) The royalty payment is for a period of seven years extendable upto 10 years. Thus, from the above it is apparent that the royalty payment is for definite period of time and the payment of royalty is directly linked to revenue receipts. In these circumstances, the entire payment made for royalty has to be treated as revenue expenditure and no element of such royalty payment can be treated as capital expenditure. - Decided in favour of assessee
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