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2014 (10) TMI 949 - ITAT DELHIPayment for royalty - nature of expenditure - revenue or capital - Held that:- Considering the fact that identical issue in 2005-06, 2006-07 & 2008-09 assessment years have been followed and the years under consideration are intervening years and noting that there is no change in facts, circumstances or position of law as held the royalty payment is determined annually on the basis of quantity and value of production, the expenditure so incurred by the assessee is essentially recurring and revenue in nature. However, the AO has treated 25% of such payment as capital in nature. The expenditure so claimed is charged on the products manufactured by the assessee company and the same is not incurred for acquiring a process or design or technology which can be utilized by the assessee for years to come so as to categorize such expenditure, as capital in nature. Nothing was brought on record by the learned DR to controvert the findings of the CIT(A). We therefore do not find any reason to interfere in the order of CIT(A) for allowing the entire payment of royalty as revenue expenditure. Appeals of the Revenue are dismissed.
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