https://www.taxtmi.com/caselaws?id=64810 Technical assistance payments under royalty agreements were held not to be disallowable merely because they appeared large compared with profits. The Tribunal found that the assessee had produced substantial collaboration and supporting material, that the technical assistance was integral to the business, and that Reserve Bank of India approval existed. It held that reasonableness must be assessed from the businessman's perspective and that suspicion, without positive material showing excessiveness, sham arrangement, or diversion of profits, cannot justify disallowance. The technical assistance expenditure was therefore allowed and the royalty disallowance was deleted. en-us Mon, 10 Jan 2005 00:00:00 +0530 Mon, 20 May 2024 10:47:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=64810 Technical assistance payments under royalty agreements were held not to be disallowable merely because they appeared large compared with profits. The Tribunal found that the assessee had produced substantial collaboration and supporting material, that the technical assistance was integral to the business, and that Reserve Bank of India approval existed. It held that reasonableness must be assessed from the businessman's perspective and that suspicion, without positive material showing excessiveness, sham arrangement, or diversion of profits, cannot justify disallowance. The technical assistance expenditure was therefore allowed and the royalty disallowance was deleted. Case-Laws Income Tax Mon, 10 Jan 2005 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=64810