Held that royalty paid in case of running business and in terms of number of vehicles sold there was no increase in capacity and existing productivity, therefore, royalty paid to extent of 2.75 per cent of number of vehicle sold was a revenue expenditure. Disallowance of Disallowance of 10 % of expenditure is held to be not valid when there is no allegation of bogus expenditure. (AY. 2000-01, 2001-02)
Mercedez-Benz India (P.) Ltd. v. DCIT (2022) 193 ITD 624 (Pune)(Trib.)
S. 37(1) : Business expenditure-Capital or revenue-Royalty paid as percentage of sale in consideration of supply of Technical Know-how is allowable as revenue expenditure-Telephone and travelling expenditure-Self made vouchers-Disallowance of 10 % of expenditure is held to be not valid.