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2015 (7) TMI 166 - AT - Income TaxTechnical know-how transfer - whether the expenditure incurred for the acquisition in question is in the capital filed or revenue? - Held that:- Perusal of the agreements clearly demonstrate that the assessee has acquired technical know-how by way of transfer from Mr.Trapp. The agreement with Mr.Glenn Trapp is for a period of 04 years. A perusal of this agreement further demonstrates that the expenditure in question was incurred for acquiring know-how with an object of improving the manufacturing process of continuous casting activities. Thus, it is a case of improving the manufacturing process, increasing efficiency and consequent profitability by incurring expenditure for acquiring technical know-how and technical assistance. As regards the issue as to whether there is enduring benefit, the company represented before the A.O. that there was no positive results consequent to this agreement and in fact the expenditure was infructuous expenditure. On facts we are of the opinion that the assessee has not acquired any capital asset nor any enduring benefit in this case. Thus, in our view the expenditure in question is in the revenue field. - Decided in favour of assessee. Disallowance of environmental study expenses - revenue v/s capital - Held that:- The expenditure was incurred for modernisation cum expansion of its existing Rajgangpur Cement Plant. The assessee has to statutorily obtain certain environmental clearances, for which the study has to be made as per the Guidelines of the Ministry of Environment and the Orissa Pollution Control Board. Under these circumstances, we are of the considered opinion, that the expenditure in question is in the revenue field. - Decided in favour of assessee. Disallowance of expenditure incurred on foreign travel - A.O. disallowed 80% of the expenses on ad-hoc basis - FAA making a disallowance of 20% of the total foreign travel expenses on the ground that there is a possibility of personal component in such expenditure - Held that:- adhoc disallowances cannot be sustained, unless there is evidence. The assessee has furnished trip wise details of its Sr.Executives and has also furnished the business transacted in each trip, export details, customer wise details of exports to various countries. Even copies of discussions held and copies of tour reports were furnished. In the face of such overwhelming evidences, to make an adhoc disallowance on surmises and conjectures cannot countenanced. In the result this ground of the assessee is allowed and the disallowance of 20% is deleted.- Decided in favour of assessee.
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