Tribunal held that that the assessee had merely obtained access to technical knowledge with regard to technique of production and the right to use of trademarks of the licensor for a year. There was no absolute transfer of the know how and the license granted was neither exclusive nor transferable. It held that this has not led to the benefit of enduring nature will constitute ‘acquisition of an asset’ and any amount for the same will constitute capital expenditure. Accordingly the appeal of revenue is dismissed. Followed CIT v. Ciba of India Ltd (1968) 69 ITR 692(SC) (ITA No. 6548 /Mum/ 2017 dt 22-05 -2019)(AY. 2012-13)
DCIT v. Asian Paints PPG Pvt. Ltd. (Mum.)(Trib.)(UR)
S. 37(1) : Business expenditure–Capital or revenue–Royalty paid for license to use is held to be revenue expenditure.