1997 (4) TMI 14

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....gment of the Madras High Court rendered in Tax Cases Nos. 59 of 1972 and 333 and 234 of 1974, dated March 14, 1977 (see [1977] 110 ITR 353). Broadly three questions were referred to the High Court. In all of them, the question involved is "whether the amount paid by the respondent-assessee to the foreign collaborator for technical know-how is a capital expenditure or a revenue expenditure". The....

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....re". Having taken a proper view of the principles to be applied, the High Court arrived at the following conclusion: "Having regard to the said clauses, we are clearly of the opinion that the Tribunal was right in its conclusion that the whole of the amount paid by the assessee constitutes revenue expenditure and has to be allowed as a deduction. From the terms of the agreement referred to abov....

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....ird parties any of the documents made available by Aturia to the assessee without having received a written authorisation from Aturia. We are of the opinion that the above features clearly establish that what was obtained by the assessee is only a licence and what was paid by the assessee to Aturia is only a licence fee and not the price for acquisition of any capital asset." We heard counsel. ....