TMI Blog2012 (9) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to be considered only u/s 35AB & not entitled to have the amount paid for acquiring know-how as an item of revenue expenditure allowable as a deduction u/s 37. As Section 35AB says that the expenditure should have been incurred for the purposes of the business of the assessee, in the present case, the Technical Assistance Agreement was entered into between the assessee and the American ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of US $2,25,000/- to be paid in three instalments. The first instalment in convertible Indian currency amounting to Rs.17,49,889/- was paid on 29th November, 1990. Subsequently, disputes arose between the contracting paries and the know-how was not transferred by the American company. The short question which arises for determination is whether the amount of Rs.17,49,889/- could be claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deducted in equal instalments for each of the five immediately succeeding previous years. Explanation to the said section says that the word `know-how' means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine. If one carefully analyzes Section 35AB of the Act, it is clear that prior to 1st April, 1986, there was some do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erican company for acquiring know-how which was, in turn, to be used in the business of the assessee. Once Section 35AB of the Act comes into play, then Section 37 of the Act has no application. For the afore-stated reasons, we see no error in the impugned judgment of the High Court. Accordingly, the civil appeal filed by the assessee stands dismissed with no order as to costs. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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