When the assessee does not get exclusive right over the technical knowhow and the trade mark, the royalty paid is revenue expenditure

CIT Vs G4S Securities System (India) Private Limited (Delhi High Court)- Payment of royalty by the assessee on a year-to-year basis on the net sales in lieu of technical know-how assistance and the trademark would not amount to capital expenditure and will amount to revenue expenditure. The ownership rights of the trademark and know-how throughout were vested with G4F and on the expiration or termination of the agreement, the assessee was to return all G4F know-how obtained by it under the agreement. The payment of royalty was also to be on a y

Please become a Premium member. If you are already a Premium member, login here to access the full content.