1994 (4) TMI 37 - HC - Income Tax

Capital Or Revenue Expenditure, Collaboration Agreement, Foreign Company, Income Tax Act, New Industrial Undertaking, Special Deduction

Summary

This is a reference under section 256(1) of the Income-tax Act, 1961 at the instance of the Revenue. The court ruled that the royalty payments made to the foreign collaborator are deductible as revenue expenditure. The Kottayam unit of the assessee was considered a new industrial undertaking entitled to deduction under section 80J.