Trace Your Case

ISSUE:

Whether the said technical fee of 30.5 million US Dollars, payable in five equal installments every year, to be treated as revenue expenditure or capital expenditure?

RULE:

The distinction between revenue expenditure and capital expenditure. The payment of technical know-how and royalty was revenue expenditure. The payment of technical know-how and royalty was not for the acquisition of any fixed asset or the setting up of the plant and machinery for the manufacture of cars in India.

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