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2012 (8) TMI 663 - AT - Income TaxRoyalty - nature - assessee acquired only a licence to use the brand name and trade marks of the foreign collaborator – Held that:- 25% of the lump sum royalty payment could be attributed to acquiring capital asset in the form of commercially valuable right to continuously use the Fenner brand name and trade mark and the balance 75% could be permissible as deduction as revenue expenditure for mere use of brand name and the trade mark. - following the decision in Southern Switchgear Limited [1997 (12) TMI 106 - SUPREME COURT] confirming the order of HC in [1983 (3) TMI 18 - MADRAS HIGH COURT] decided in favor of revenue. Applicability of provisions of section 32(1) – Held that:- Assessee has not either owned wholly or partly any know-how, patents, copy rights, trade mark, etc. so as to apply the provisions of section 32(1) - assessee is only permitted to use trade mark and brand name of the foreign collaborator with certain conditions - provisions of section 32(1) are not applicable to the facts of the assessee’s case.
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