TMI Blog1997 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... y a "licence fee" and not the price for acquisition of a "capital asset". It was concluded that the entire payment constitutes revenue expenditure and the questions were answered in favour of the assessee - Civil Appeals No. 2334, 2335, 2336 of 1984 - - - Dated:- 3-4-1997 - K. S. PARIPOORNAN. and S. SAGHIR AHMAD. JUDGMENT These appeals are by the Revenue against the judgment of the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng nature" which will constitute "acquisition of an asset" and so the amount paid for the same is a "capital expenditure" or whether the assessee had only acquired technical knowledge for the manufacture of any particular item for a specific duration, and he acquired only a "licence to use the other party's patent and knowledge" and the amount paid would only be a "revenue expenditure". Having tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria had undertaken not to surrender its patents without the consent of the assessee and to make available to the assessee any improvements, modifications and additions to designs ; (4) Aturia has also undertaken to enable the assessee to defend any counterfeit by others and also had undertaken to share the expenses with reference thereto ; (5) The assessee shall not disclose to third parties any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt constitutes revenue expenditure and the questions were answered in favour of the assessee. We are of the opinion that the reasoning and conclusion of the High Court are unassailable. The High Court rightly held that the expenditure incurred in the present cases by the assessee is only a revenue expenditure. These appeals fail and are dismissed with no order as to costs. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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