TaxTMI 
TaxTMI 
2010 (3) TMI 293
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.... Ld CIT (A) in directing the Assessing Officer to allow the technical know how fees amounting to Rs.6,82,00,029/as revenue expenditure u/s 37 of the I.T. Act without appreciating the fact that the same was in the nature of capital expenditure being incurred on the acquisition of intangible asset of enduring nature? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the agreement between the assessee company and KMK Lizence Limited was operational in financial year 1997-1998, even before obtaining the required approval of Government of India on 5-6-1998? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee did ....
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....or infringement of the patent in order to defend the proprietary rights of the licensor against reimbursement of expenses by the licensor. The licence agreement which was executed in the year 1997, was modified on 15th June 1998. The modification related to the payment of consideration and the terms of the licence. Under the original agreement, the assessee was to pay to the licensor an amount of CHF 280,000 for every machine manufactured and the term was two years. Under the modified agreement, a technical know how fee of CHF 20,78,500 Swiss Francs net of taxes was payable in four installments while the royalty was fixed at five per cent for each captive use / domestic sale of a machine and eight per cent for exports for five years. The te....
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....sessee did not acquire an asset of a capital nature. In Commissioner of Income Tax V/s. CIBA of India Limited {(1968) 69 ITR 692 (S.C.)}, the Supreme Court dealt with a case where a Swiss company had undertaken to deliver to the assessee processes, formulae, scientific data, working rules and prescriptions pertaining to the manufacture or processing of products discovered in the laboratories of the company. The assessee was granted full and sole rights and a licence under the patents, to make use exercise and vend the inventions referred to in India. In consideration of the right to receive scientific and technical assistance, the assessee had agreed to make stipulated contributions. The assessee was held to be a mere licensee for a limited....
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....having acquired either wholly or any part, proprietary rights by or under the licence agreement dated 1st September 1997 as modified on 15th June 1998. 6. On behalf of the Revenue, it was sought to be submitted that the acquisition of know how under a licence would fall within the ambit of Section 32 of the Income Tax Act, 1961 as amended. On the finding of fact which has been arrived at by the Commissioner of Income Tax (Appeals) and by the Tribunal it has emerged from the record in the present case that the assessee had as a matter of fact not acquired a proprietary interest or ownership in respect of the subject matter of the licence either wholly or in part so as to attract the provisions of Section 32. Having regard to the factual p....