2001 (6) TMI 48

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....any manufacturing ball bearings. The assessment year is 1980-81. The assessee entered into an agreement styled "Technical Collaboration Agreement" with Industriework Echsofflar, INA Ingenieur Disast GmbH, Federal Republic of Germany (INA). The agreement provided for the supply of technical know-how, which the INA had already developed, being in the same line of business, for a lump sum consideration of Rs. 3 lakhs and subject to Indian tax is sold to the assessee. According to clause 7 of the agreement, the lump sum was to be paid in the instalments as under : (a) Rs. 2 lakhs after the agreement has been taken on record by the Government of India. (b) Rs. 1 lakh after the commencement of the commercial production. The assessee clai....

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....know-how, even after the period of the agreement. The fact that under the agreement the assessee had to pay Rs. 2,00,000 to the German company, after the agreement has been taken on record by the Government is not disputed. Under that agreement the assessee has paid Rs. 2,00,000 to the German company. The expressions, "products", "technical know-how", "INA patents" and "territory" are all defined in the agreement itself. Clause 10 of the agreement provides that the agreement will be for a period of five years from the date of the commencement of the production and on production the assessee has to pay the royalty as per the terms of the agreement for five years. Sub-clause (b) of clause 10 of the agreement provides that upon the expiry o....