Dismissing the appeal of the assessee the Court held that ;the assessee has not led any evidence to establish the manner in which the technical know-how as acquired from G4S had been used in its business. The authorities have also held that the Incident Report Format produced on account of ERP obtained from an Associate Enterprise to whom the payment was made, was in fact being carried out by the assessee even prior to entering into an agreement dated 27-12-2007 with G4S. The concurrent finding recorded is that the assessee had offered no explanation as to the manner in which the agreement had helped the assessee to carry out its business. These are findings of facts. Thus, mere entering into an agreement with it being actually put to use, cannot lead to the conclusion that the payment made under the agreement was for knowledge to be used in its business. (AY. 2008-09 , 2009-10)
Monitron Security (P.) Ltd. v. CIT (2018) 257 Taxman 351 (Bom.)(HC)
S. 37(1) : Business expenditure -Capital or revenue-Amount paid to associate company, (G4S) for providing expert advisory and other security related services and knowhow inter-alia including use of trademarks -Not allowable as business expenditure as the amount was not incurred for wholly and exclusively for business purposes ,as the assessee has not led any evidence to establish the manner in which the technical know-how as acquired from G4S had been used in its business.