https://www.taxtmi.com/caselaws?id=8066 Royalty paid under an agreement for technical information, trade mark use and manufacturing assistance was held to be revenue expenditure deductible in computing business profits. The court applied the principle that the true character of an outgoing depends on its purpose and surrounding circumstances. Because the payment was recurrent, linked to actual manufacture and sales, and formed part of the commercial arrangement enabling the assessee to carry on business, it was treated as part of the profit-earning process. The court further noted that no capital asset or enduring right was acquired, and the foreign company was not parting with a capital asset by supplying know-how. The royalty was therefore allowable as a deduction. en-us Wed, 16 Apr 1969 00:00:00 +0530 Fri, 27 Mar 2009 18:00:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8066 Royalty paid under an agreement for technical information, trade mark use and manufacturing assistance was held to be revenue expenditure deductible in computing business profits. The court applied the principle that the true character of an outgoing depends on its purpose and surrounding circumstances. Because the payment was recurrent, linked to actual manufacture and sales, and formed part of the commercial arrangement enabling the assessee to carry on business, it was treated as part of the profit-earning process. The court further noted that no capital asset or enduring right was acquired, and the foreign company was not parting with a capital asset by supplying know-how. The royalty was therefore allowable as a deduction. Case-Laws Income Tax Wed, 16 Apr 1969 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8066