1982 (7) TMI 6

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed to us in this reference under a. 256(1) of the I.T. Act, 1961 (" the Act "), at the instance of the Revenue is as follows: " Whether, on the facts and in the circumstances of the case, the payment of the sum of Rs. 1,20,250 by the assessee to Westinghouse Electric International Co. is an expenditure of a revenue nature, and is allowable as a deduction in computing the total income of the ass....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) Drawings. (b) Process specifications. (c) Material specifications. (d) Performance specifications. (e) Purchasing specifications. (f) Test data. The only material clause for the purposes of this reference is the clause regarding the first payment to be made by the licensee as consideration for the licences, information, rights and services granted, furnished and rendered and to....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ars and the payment was a part and parcel of the mode of payment in respect of use of information, rights, etc. Following the decision in CIT v. Ciba of India Ltd. [1968] 69 ITR 692 (SC), the orders of the ITO and the AAC were set aside and the expenditure was held to be of revenue nature. The correctness of this view is put in issue in the question referred and reproduced earlier. Mr. Joshi on....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t. The nature of the expenses incurred in pursuance of such collaboration agreement has been considered by this court in CIT v. Tata Engineering & Locomotive Co. (P.) Ltd. [1980] 123 ITR 538. It has been pointed out in that case that technical know-how and technical advice cannot be treated as a capital asset and merely because the assessee who had entered into a contract with regard to know-how i....