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Income Tax - Highlights / Catch Notes

Home Highlights October 2020 Year 2020 This

Nature of expenditure - R&D expenditure - Raw-Material, tools ...


Assessee's costs on raw materials and tool designs for custom products are revenue expenses u/s 37.

October 10, 2020

Case Laws     Income Tax     AT

Nature of expenditure - R&D expenditure - Raw-Material, tools designs ultimately determined by the assessee and used for manufacture of customised products were not meant for uniform application for other customers also, and therefore the expenditure incurred for development of customized products and manufactured and sold by the assessee need not to be capitalized. These are to be treated as revenue expenditure and deserve to be allowed under section 37 of the Income Tax Act. - AT

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