Royalty payment and R&D on royalty both allowable as revenue expenditure

Maruti Suzuki India Ltd. Vs DCIT (ITAT Delhi) ITAT Delhi held that royalty payment and R&D cess on royalty is interlinked. As royalty payment is allowed as revenue expenditure, R&D cess is also allowable as revenue expenditure. Facts- AO noticed that the assessee had made payment of Royalty amounting to Rs. 1035,49,95,272/- to Suzuki Motor Corporation (“SMC”) in the year under consideration and had paid cess on Royalty amounting to Rs. 43,79,33,132/-. AO called upon the assessee as to why Royalty payment should not be treated as capital expenditure. In response thereto, the assesse...