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

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