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2010 (3) TMI 293 - HC - Income TaxTechnical know how fees – Acquisition of ownership rights - Revenue Expenditure Versus Capital Expenditure ––technical know how fees amounting to Rs.6,82,00,029 - Duty Free Advance licence credited in the books – Held that: The assessee was not entitled to transfer the rights which it obtained under the licence and had a limited right to use the technical know how for manufacturing machines over a limited tenure - technical know how fees amounting to Rs.6,82,00, 029 allowed as revenue expenditure – assessee cannot be regarded as having acquired either wholly or any part, proprietary rights by or under the licence agreement dated 1st September 1997 as modified on 15th June 1998. - i the assessee had obtained the benefit, purely on a non-exclusive basis, of a licence confined to the territory of India, for a limited term and that the proprietary rights in the patents which formed the subject matter of the licence continued to vest in the licensor, the provisions of Section 32 were not attracted in this case.t is not a capital assets u/s 32 - No application (for Duty Free Advance licence ) was made by the assessee during the assessment year 1999-2000 and consequently no real income had accrued to the assessee during that period. – revenue appeal dismissed.
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