1998 (3) TMI 38 - HC - Income Tax

Summary

The judgment of the High Court of Madras, delivered by N. V. Balasubramanian J., concerned the assessee, a non-resident company, which paid Rs. 10,000 to its foreign collaborator and claimed it as a deduction. The Income-tax Officer disallowed the claim, considering it capital expenditure. The Commissioner (Appeals) and the Appellate Tribunal both held it as revenue expenditure. The High Court, in Tax Case No. 624 of 1977, directed the Tribunal to rehear the matter. The Tribunal reaffirmed its decision that the amount paid was revenue expenditure. The High Court agreed, stating, "since there was no asset acquired by the payment of the said sum, the Tribunal has come to the correct conclusion that the amount paid is revenue expenditure." The question of law was answered in the affirmative and against the Revenue, with no order as to costs.