Held by the High Court, that assessee was not the owner of the trademark and it only had permission / approval to use such trademark and any benefit of the use of the trade mark during the period when it stood licensed to the assessee inures to the owner of trademark. The use of trademark thus merely facilitated the assessee’s business and the lump-sum payment was for the purpose of obtaining an advantage in carrying on its business hence of revenue nature. (AY. 1996-1997)
Hilton Roulunds Ltd .v. CIT (2018) 304 CTR 721 / 167 DTR 131 / 255 Taxman 209 / 2019) 412 ITR 436(Delhi)(HC)
S. 37(1) : Business expenditure –Capital or revenue-Assessee did not purchase and acquire title in the trademark or retain any rights in the mark – Lump-sum payment was for obtaining an advantage in carrying on its business as it merely facilitated the assessee’s business in India and hence of revenue nature.