Trade mark registration costs are revenue expenditure where the benefit is limited, renewable, and not of enduring character.

Expenditure incurred for obtaining trade mark registration was treated as revenue expenditure because it was recurring, did not create a capital asset, and did not confer an enduring advantage; the limited registration period and need for renewal supported that characterisation. The outlay was also regarded as wholly and exclusively incurred for business purposes, so it was allowable as a revenue outgoing and not capital expenditure.

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Issues: Whether expenditure incurred for registration of a trade mark is revenue expenditure or capital expenditure.

Analysis: The expenditure was held to be recurring in nature and did not bring into existence an asset or an advantage of enduring character. Any right associated with registration of the trade mark was not treated as a permanent benefit, since the registration lasted only for a limited period and required renewal. The expenditure was also regarded as having been incurred wholly and exclusively for the assessee's business.

Conclusion: The expenditure on trade mark registration was revenue expenditure and not capital expenditure, in favour of the assessee.

Final Conclusion: The reference was answered by holding that the relevant expenditure was allowable as a revenue outgoing.

Ratio Decidendi: Expenditure incurred for obtaining trade mark registration is revenue in nature where it is recurring and does not create an asset or an enduring advantage.

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