TMI Blog2002 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-availability of other inputs required to make the project success. The return of the know-how in the subsequent year would not affect the factum of payment having been made in the relevant previous year for the purpose of acquisition of the know-how. - The Tribunal, therefore, was right in the view it took - - - - - Dated:- 11-9-2002 - Judge(s) : R. JAYASIMHA BABU., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by R. JAYASIMHA BABU J.-The question referred to us at the instance of the Revenue is, "whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee is entitled to deduction under section 35AB?" The assessment year is 1991-92. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal had omitted to take note of the fact that by the time the assessment came to be made on March 31, 1994, the assessee had returned the know-how to the Japanese company with a request to waive the instalments payable in terms of the earlier agreement of the parties. Counsel submitted that the word "acquire" found in section 35AB is to be understood in the sense of "acquiring ownership" and since the know-how was returned, the assessee cannot be regarded as the owner. So far as the know-how supplied by the German company is concerned, it was submitted that since the project was abandoned, the know-how was useless for the purpose of the assessee's business and that the Tribunal was, therefore, in error in allowing the deduction. "Kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired would not take away the fact that the expenditure had been incurred for the purpose of acquiring the know-how in the relevant previous year. Section 35AB was introduced into the statute by the Finance Act, 1985, with effect from April 1, 1986. Its operation was limited to the period till April 1, 1997, when "know-how" was included in section 32 as a depreciable asset. During the period when section 35AB operated, full effect must be given to the provision in those years and subsequent treatment given by Parliament to "know-how" by treating it as a depreciable asset cannot determine the scope and extent of the section during the period in which it was operative. During the period section 35AB remained effective, the "know-how", irresp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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