TaxTMI 
TaxTMI 
1982 (12) TMI 5
X X X X Extracts X X X X
X X X X Extracts X X X X
....nditure incurred on the acquisition of library for the assessment year 1973-74 ? " The Tribunal and other authorities under the Act have negatived the assessee's claim for depreciation on the ground that the judgment of this court in R.C. No. 21 of 1971, dated January 17, 1973, clearly negatives such a claim, and hence it cannot be allowed. Mr. Y. V. Anjaneyulu, the learned counsel for the assessee, contends before us that the authorities and the Tribunal have erred in understanding the judgment of this court as covering the question now at issue. He submits that the said decision did not consider this aspect and did not pronounce upon the precise question now at issue, and hence the said judgment cannot be treated as conclusive upon the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2,000 towards depreciation on library. The assessee's case was that the payment of Rs. 1,60,000 made to the Hungarian company has been debited under the head " Library" and, therefore, it is entitled to depreciation thereon under s. 32 of the Act. This claim was rejected by the ITO who held that the price paid for acquiring technical know-how amounts to capital expenditure and since no tangible or depreciable asset was brought into existence, the claim for depreciation is unsustainable. On appeal, the AAC held that, inasmuch as the assessee had purchased outright the specimen drawings, charts, plans, etc., on payment of Rs. 1,60,000 and since they can be termed as " books", the assessee is entitled to depreciation. Aggrieved by the decision....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was justified in dismissing the Department's appeal challenging the direction by the Appellate Assistant Commissioner to grant depreciation at the rates applicable to books ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in allowing a sum of Rs. 12,000 as revenue expenditure while disposing of the departmental appeal, particularly when the point urged before the Appellate Tribunal was not whether it was a revenue item of expenditure, or not?" The Tribunal, however, referred only the following consolidated question for the opinion of this court: " Whether, on the facts and in the circumstances of the case and on a true interpretation of the collaboration agreements between the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....but not form, must be held to be an out-and-out sale-of technical know-how as the main object and purpose of the agreements is to enable the assessee to manufacture theodolites and to acquire the right to sell them ; and the other clauses are only auxillary or incidental. The use of the words " supplies " and " supply " in clause 3 and the word " services " in clause 6(m) of the agreement support the plea advanced on behalf of the Department, that the designs, drawings and charts are illustrative of the services rendered by the foreign collaborator. It is pertinent to notice that the terms of the agreement rule out the theory of sale or purchase of designs, drawings and charts, etc." It is these observations which are relied upon by the au....