COMMISSIONER OF INCOME-TAX,U.P., LUCKNOW. vs BRITISH INDIA CORPN. LTD., KANPUR.

The Supreme Court held that the payment of Rs.50,000 made by the assessee to its distributors under the agreement was a revenue expenditure under Section 10(2)(XV) of the Income Tax Act, 1922, rather than capital expenditure. The Court reasoned that the payment was integral to acquiring technical know-how and was necessary for the operational agreement with the distributors. The High Court's decision to allow the deduction was upheld, dismissing the Revenue's appeal.