Provisions of S. 35AB are not applicable to Revenue expenditure:

Provisions of Section 35AB dealing with expenditure on know-how shall be applicable only if any such expenditure incurred is Capital in nature. The Revenue expenditure on know-how would be continued to be governed by the provisions of S. 37(1) of the Act. Provisions of S. 35AB won’t apply to Revenue expenditure even if the same is in respect of know-how.

[SAYAJI INDUSTRIES LTD. - TAX APPEAL No.326 of 2000 - GHC]