TMI Blog2001 (1) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... has referred the following two questions of law for the opinion of this Court in respect of the assessment year 1981-82 : 1. Whether, in law and on facts, the assessee is entitled to allowance of technical know-how fees of ₹ 7,16,654 paid to WCW, West Germany ? 2. Whether, in law and on facts, the assessee is entitled to allowance of ₹ 1,12,30,810 being payment as technical d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturing drawings, specifications, etc., to Weserhutte, West Germany, as per the agreement dated 6-8-1980. This payment was claimed as a deduction for the reason that know-how, etc., had been acquired on behalf of another company by the name of Negveli Lignite Corpn. This company had paid the amount to the assessee, i.e., Elecon Engineering, for this know-how and Elecon Engineering had only furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Suhrid Geigy Ltd. [1996] 220 ITR 153 , the Division Bench of this Court has taken a view that where expenses are incurred in areas which supplement the existing business and are not a fresh or new venture and the agreement for acquiring technical know-how pertains to a product already in the line of the established business and is intended to improve the operations of the existing busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further paid the amount to the German company. The know-how was never utilized by the assessee. Therefore, in our view, the assessee is entitled to allowance of ₹ 1,12,30,810 being payments as technical design fees to foreign collaborators. Question No. 2 is answered in the affirmative, i.e., in favour of the assessee and against the revenue. The reference, accordingly, stands disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
