Commr.Of Income Tax-Ii,Chandigarh vs M/S Swaraj Engines Ltd

The Supreme Court addressed the applicability of Section 35AB of the Income Tax Act, 1961, regarding the classification of royalty expenditure as either revenue or capital in nature. The Court found that the High Court's decision on this matter was not definitive, necessitating a remand for fresh consideration. The Court emphasized that the nature of the expenditure must be determined first to ascertain the applicability of Section 35AB, thus setting aside the High Court's judgment for further examination.