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Income Tax - Highlights / Catch Notes

Home Highlights September 2014 Year 2014 This

Royalty paid treated as capital expenses - the assessee company ...

Income Tax

September 20, 2014

Royalty paid treated as capital expenses - the assessee company did not obtain any proprietary or ownership right of trademark or knowhow, no asset was created or acquired - held as revenue expenditure - AT

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  1. Nature of franchise fees paid - capital or revenue expenditure - Right to use the trademark, domino’s name and logo – Exclusive license – Held as revenue expenditure - AT

  2. Disallowance of expenditure as capital expenditure being 25% of royalty amount paid - it cannot be said that the Sweden Company had relinquished its command over the...

  3. Taxability of Royalty under the Act - Since the Indian company who obtained the rights is acting independently, Agency PE provisions are not applicable to the assessee company - AT

  4. Capital or revenue expenses - Disallowance of royalty - if there is no sales, no royalty is payable by the assessee - held as revenue in nature - AT

  5. Disallowance of royalty - capital OR revenue expenditure - The ownership/ proprietary rights in the technical know-how continue to vest in lithe censor and the assessee...

  6. Abandonment of trademark application - Failure to respond to objection raised over trademark registration application - the Act does not contain a prohibition against...

  7. Transfer of right to use trademark - The sales tax is leviable on the turnover of sales in respect of transfer of right to use any goods - HC

  8. Stock Appreciation right expenses claimed by the appellant is not in a capital expenses, but revenue expenditure and ascertained liability therefore it is allowable expenses - AT

  9. Stock Appreciation right expenses claimed by the appellant is not in a capital expenses, but revenue expenditure and ascertained liability therefore it is allowable expenses - AT

  10. Disallowance of building renovation expenses – Capital or revenue expenses - the expenses are to be treated as revenue in nature and allowable u/s 37(1) of the Act - AT

 

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