The assessee is engaged in the chit fund business.\u00a0The issue involved includes a question on whether the royalty payments made by the assessee to its parent company for using its logo should be treated as revenue expenditure or capital expenditure.<\/p>\n
The revenue argued that the royalty payments should be treated as capital expenditure because they were for acquiring an intangible asset, thus only allowing for depreciation at 25% under Section 32. The assessee argued that the royalty payments were for the use of the parent company’s logo and trademark, which were non-transferable and non-exclusive, and thus should be treated as revenue expenditure under Section 37(1).<\/p>\n
The Hon\u2019ble Tribunal ratifying the argument of the Assessee held that the royalty payments were revenue in nature and allowed the full deduction under Section 37(1).<\/p>\n
The Hon\u2019ble High Court upheld the Hon\u2019ble Tribunal’s decision, ruling that the royalty payments for the use of the logo or trademark for a particular period, aimed at business improvement\/expansion, qualify as revenue expenditure under Section 37(1).(AY. 2014-15) \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S.37(1): Business expenditure-Capital or revenue-Payments made by an assessee for the use of a logo or trademark for a particular period, aimed at business improvement\/expansion, qualify as revenue expenditure.[S. 260A] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-53217","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-dQl","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/53217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=53217"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/53217\/revisions"}],"predecessor-version":[{"id":53218,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/53217\/revisions\/53218"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=53217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=53217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=53217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}