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2017 (3) TMI 396 - HC - Income TaxAllowable business expenditure - payment of royalty paid to M/s Hongo Japan - Held that:- The expenditure incurred by the assessee towards royalty and fee for technical assistance in pursuance of the licence agreement entered between the assessee and the company M/s Hongo Japan were revenue expenditure and not capital in nature in view of the fact, upon termination of the licence agreement, all rights created in favour of the assessee under the licence agreement stood extinguished and no benefit was passed on to or retained with the assessee. This court in the case of CIT versus Kanpur Cigarettes (P) Ltd. [2005 (3) TMI 61 - ALLAHABAD High Court ] has in respect of a similar clause in the licence agreement held that nature of expenditure is revenue and not capital. The facts of the existing case in material part is similar to those in the case of Kanpur Cigarettes (supra). - Decided in favour of the assessee
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