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2015 (6) TMI 960 - AT - Income TaxTreatment to acquiring technical know - revenue v/s capital expenditure - Held that:- Assessee was entitled only access to the technical knowledge and information from Daikin for manufacturing of licensed and existing products and it was not a case of absolute transfer of Daikin Technology. The assessee’s right to use license was being hedged with all sorts of conditions as noted. The assessee had acquired the business of Siel Ltd. on a going concern basis vide business purchase agreement dated 8th August, 2000. The technological collaboration agreement with Daikin entered into on the same date primarily facilitated in improving the technical aspect of manufacturing but it did not essentially formed part of the revenue earning apparatus 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 decision of Hon’ble Jurisdictional High Court in the case of JK Synthetics (2008 (12) TMI 21 - DELHI HIGH COURT), wherein held expenditure incurred for grant of License which accords ‘access’ to technical knowledge, as against, ‘absolute’ transfer of technical knowledge and information would ordinarily be treated as revenue expenditure. This issue is also covered by the decision of Hon’ble Jurisdictional High Court in CIT vs. Goodyear India Ltd., (2000 (3) TMI 47 - DELHI High Court ), wherein it has been held that consideration paid for betterment of the product was in revenue field. - Decided in favour of assessee.
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