The assessee entered into a long-term technology licensing agreement with EADS for commercialisation of intellectual property rights and capitalised the payment as an intangible asset while claiming depreciation. Alternatively, it claimed deduction under section 37(1). The Tribunal, after examining the terms of the agreement and the revenue generated therefrom, held that the expenditure was incurred wholly and exclusively for carrying on the assessee’s business and did not result in acquisition of any depreciable business or commercial right. The alternative claim under section 37(1) was therefore allowed, and the Assessing Officer was directed to treat the expenditure as revenue expenditure. The foreign exchange loss related to the payment made under the same technology licensing agreement which the assessee had capitalised as an intangible asset. Following its finding that the principal expenditure was allowable under section 37(1), the Tribunal held that the corresponding foreign exchange loss also retained the character of revenue expenditure and directed the Assessing Officer to allow the deduction\u00a0 (AY. 2012-13).<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1): Business expenditure-Technology licensing agreement-Payment initially capitalised as intangible asset-Expenditure held allowable as revenue expenditure- Foreign exchange loss-Expenditure arising from same business agreement-Revenue expenditure allowable. [Expln. 3 to S. 32(1)]<\/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_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-63672","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gyY","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63672","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=63672"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63672\/revisions"}],"predecessor-version":[{"id":63673,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63672\/revisions\/63673"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=63672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=63672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=63672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}