Case Law Details
Case Name : CIT Vs. H-One India Pvt. Ltd. ( Allahabad High Court)
Appeal Number : Income Tax Appeal No. 240 of 2013
Date of Judgement/Order : 03/03/2017
Related Assessment Year : 2009-10
Courts :
All High Courts Allahabad High Court
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Royalty and fee for technical assistance are revenue in nature if upon license termination rights created in favour of assessee gets extinguished.
Expenditure incurred by the assessee towards royalty and fee for technical assistance in pursuance of the licence agreement entered between the assessee and the company M/s Hongo Japan were revenue expenditure and not capital in nature in view of the fact, upon termination of the licence agreement, all rights created in favour of the assessee under the licence agreement stood extinguished and no benefit was passed on to or retained with the assessee.
Issue before Consideration
Whether on the facts and circumstances of the case, the ITAT was legally justified in holding that the payment of royalty paid to M/s Hongo Japan is an allowable business expenditure in the hands of the assessee company and cannot be held to be capital in nature.
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