TaxTMI 
TaxTMI 
1986 (9) TMI 7
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....EYULU J.-The Commissioner of Income-tax seeks reference of the following question in connection with income-tax assessment year 1980-81 : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the expenditure of Rs. 1,15,000 incurred by the assessee on acquisition of technical know how is not capital expenditure ? " We have hear....
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....acture of diesel locomotives and narrow gauge wagons. Pursuant to the agreement entered into by the assessee with M/s. Ventra Engineering Company, a sum of Rs. 1,15,000 was paid during the accounting year relevant for the assessment year 1980-81 towards fees for supply of drawings, designs and supervision of the manufacture of locomotives manufactured by the assessee. The question for consideratio....
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....d as a capital asset. We must point out that in the case relied upon by learned standing counsel, the expenditure incurred on the payment of technical collaboration fee consisting of drawings, designs, charts, plans, etc., was capitalised by the company. A claim for depreciation was made before the tax authorities on the expenditure so capitalised. The Revenue declined to grant depreciation on ....
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.... is not in dispute that the assessee has been carrying on business in the manufacture of locomotives. It is also not denied that the technical collaboration fee was paid to M/s. Ventra Engineering Company for the purpose of technical information furnished for the manufacture of products. In our opinion, the expenditure incurred by an assessee in obtaining technical information for the manufacture ....