Expenditure claimed as revenue in nature is allowable U/s. 37(1) not U/s. 35AB of the Income Tax Act, 1961

RELEVANT PARAGRAPH 25.9 In the light of the above discussion, if we consider the facts of the case under consideration, we find that the expenditures were incurred though on technical know-how but in respect of improving the performance of existing product i.e. utility vehicles. It is not the case of the revenue that these expenditures are capital in nature. Payments were intimately linked up with the manufacturing activities of the assessee and not with the capital values of the assets that the assessee would acquire. The Apex court in the case of Swaraj Engines Ltd., though the matter was se...