2018 (11) TMI 796 - SCH - Income Tax

Technical fee/ royalty payable in five equal installments on yearly basis - to be treated as revenue expenditure or capital expenditure - Held that - It appears that by our Judgment 2017 (6) TMI 524 - SUPREME COURT OF INDIA lump sum payment as well as continuing royalty both are treated as capital expenditure for the assessment years in question. Since these are capital expenditure, needless to mention that the applicant/appellant shall be entitled to depreciation thereon.

Summary

The Supreme Court ruled that lump sum payment and continuing royalty are treated as capital expenditure, entitling the applicant to depreciation. The Miscellaneous Application and I.A. for directions are disposed of.