https://www.taxtmi.com/caselaws?id=285690 Royalty payments payable under an agreement that together with an instalment formed the consideration for acquiring rights to manufacture and sell a patented product are capital expenditure and not deductible under Section 10(2)(ix) of the Income Tax Act. The agreement must be construed as a whole, and a royalty described as contingent at inception becomes definite and ascertainable as sales occur and can be accounted for. Where such payments operate as part of the purchase consideration for an asset or right conferring ongoing benefit, they are properly characterised as capital rather than revenue expenditure. en-us Wed, 16 Dec 1931 00:00:00 +0530 Wed, 22 Jan 2020 12:12:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=285690 Royalty payments payable under an agreement that together with an instalment formed the consideration for acquiring rights to manufacture and sell a patented product are capital expenditure and not deductible under Section 10(2)(ix) of the Income Tax Act. The agreement must be construed as a whole, and a royalty described as contingent at inception becomes definite and ascertainable as sales occur and can be accounted for. Where such payments operate as part of the purchase consideration for an asset or right conferring ongoing benefit, they are properly characterised as capital rather than revenue expenditure. Case-Laws Income Tax Wed, 16 Dec 1931 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=285690