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2010 (12) TMI 534 - AT - Income TaxDisallowance - Royalty - Capital or revenue expenditure - it was the case of the learned DR that though Tribunal has rightly held that the nature of amount paid by the assessee was a capital expenditure but the allocation of 25% towards capital was not sufficient as the case of the Revenue is that the expenses so claimed by the assessee were capital in their entirety - It is agreed between the Parties that the relevant portion of this Agreement, particularly for the purposes of Articles 3, 4.2 and 8, CS shall obtain the necessary approval from the Government of India, so as to implement this Agreement - the main element for which the assessee is paying fee/royalty to the SO relates to day to day process of production by the assessee as by getting those expertisation and assistance, the assessee is able to carry out its process of production more efficiently - if one has to examine the proportion of the assistance got by the assessee from SO which gave the enduring benefit and which gave the benefit of day to day process of production then it can be said that a rightful proportion will be 75% towards regular course of process of production and 25% towards enduring benefit - Appeal is partly allowed
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