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2012 (8) TMI 796 - AT - Income TaxCapital expenditure vs Revenue expenditure - development fee paid to manufacturer (foreign company) based on an agreement, which required manufacturer to supply the required quantities of the items(developed as per its specification) to the assessee for a period of five years - development fee developing Liquid Crystal Display Units – assessee contending the same to be revenue in nature - Held that:- It is undisputed that payments were made for customized products. Also, if the components so developed were sold to any other persons by M/s.Fujitsu, then royalty was payable to assessee. Hence, it led to the creation of a type of asset, which could give rise to royalty income to the assessee in future. Therefore, payments resulted in creation of a commercial right to the assessee over such developed components. Further, benefit was of an enduring nature. Same has been rightly held as intangible asset eligible for depreciation. Moreover, assessee himself has treated it as a capital out go and claim of it being revenue in nature was never made by filing a revised return. In the original return, assessee had itself claimed only depreciation – Decided against assessee
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