2014 (11) TMI 1248

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..... his is an appeal arising from an order of ld. CIT(A)-XV, Delhi dated 29th July, 2013 relates to A.Y. 2008-09. 2. The solitary issue involved in the grounds raised by the assessee relates to denial of deduction of Rs. 57,7,094/- representing expenditure incurred on payment of royalty to M/s Macnaught Pvt. Ltd., U.K. 3. After considering the rival submissions, the evidence on record, we find the i .....

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..... the assessee for putting the trademark MACNAUGHT on the products of the assessee and using drawing etc. This royalty was linked to the volume of sales. The assessee is using the knowhow, trademark and licenses without any right to the license. The rights remained with the licensor, therefore, this payment of royalty cannot be treated as capital in nature. It was paid for use of technology and trad .....

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..... technology at initial stage at sum total of the royalty paid in various subsequent years." 4. Following the aforesaid order, it is held that expenditure incurred on royalty is a Revenue expenditure, incurred wholly and exclusively for the purpose of business. As a result, the claim made by the assessee is allowed and disallowance is deleted. 5. In the result, the appeal is allowed. Order pron .....

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