2015 (4) TMI 332

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....AT (OPEN COURT) 1. The Revenue is aggrieved by the order of the Income Tax Appellate Tribunal (ITAT) dated 30.11.2012 in ITA No.1328/DEL/2011. The question of law sought to be urged is "Whether the sum of Rs. 43.75 lakhs originally added by the Assessing Officer (AO) on account of technical fee is capital expenditure." 2. The relevant facts are that the assessee in Assessment Year (AY) 2005-06 r....

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....it to tax by disallowing the whole amount. The CIT (Appeals) however accepted the assessee's contention and directed exclusion of that amount and held that it properly fell in to the revenue expenditure. 3. The ITAT, after appreciating the various terms and conditions of the technical know-how agreement and also the various decisions of this Court including CIT vs. J.K.Synthetics 309 ITR 371 and ....

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....viz. plant and machinery of assessee. The expenditure incurred for acquiring technology which becomes part and parcel of revenue earning apparatus can only be said to be in capital field but where the-technology only facilitated in improving the manufacturing process, it could not be said to be part and parcel of capital structure of company. We find that this issue is squarely covered by the deci....

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....apital stream cannot be stereo typed into any formula. As noticed in Alembic Chemicals Work Co. Ltd. vs. CIT (1989) 177 ITR 377, ("in the infinite variety of situational diversities in which the concept of what is capital expenditure and what is revenue arises it is well nigh impossible to formulate any general-rule, even in generality of cases sufficiently accurate and reasonably comprehensive, t....