https://www.taxtmi.com/caselaws?id=285690 Royalty paid under the agreement for acquiring rights in a patent medicine was treated as part of the purchase price for the business source, not as a recurring revenue outgoing incurred solely to earn income. Reading clauses (1) and (2) together, the agreement showed that the royalty formed part of the consideration for acquisition of the business rights themselves. The fact that the royalty amount was variable and became ascertainable only after sales began did not alter its character. The payment was therefore capital expenditure and not deductible under the Indian Income-tax Act. 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 paid under the agreement for acquiring rights in a patent medicine was treated as part of the purchase price for the business source, not as a recurring revenue outgoing incurred solely to earn income. Reading clauses (1) and (2) together, the agreement showed that the royalty formed part of the consideration for acquisition of the business rights themselves. The fact that the royalty amount was variable and became ascertainable only after sales began did not alter its character. The payment was therefore capital expenditure and not deductible under the Indian Income-tax Act. Case-Laws Income Tax Wed, 16 Dec 1931 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=285690