TMI Blog1993 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 256(2) of the Income-tax Act, 1961, the Tribunal has referred the following questions for the assessment year 1980-81 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that technical know-how fees of Rs. 33,33,333 paid to S.R.G. Kugeller Works Schemid Roost, A.G. Switzerland was revenue expenditure ? 2. Whether, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not includible in the calculation of the disallowance under section 40A(5) of the Income-tax Act, 1961, as perquisite ?" The first question is relating to the admissibility of the technical know-how fees under the collaboration agreement as the revenue expenditure. An identical question has been decided by this court in favour of the assessee in the assessee's own case in CIT v. National Engin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Centre and further contribution of Rs. 1,01,000 to NEI Officers and Executives Welfare Scheme aggregating to Rs. 2,01,000. The Commissioner of Income-tax (Appeals) by following his order for the assessment year 1976-77 deleted the addition. On further appeal, the Tribunal maintained the order of the Commissioner of Income-tax (Appeals) by following its order for the assessment year 1976-77 in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve adversely affected the assessee's business. The expenditure incurred merely for the purpose of keeping the workers happy and maintaining industrial peace and cordial relations with the employees is by now an accepted expenditure of the carrying on of a business. Without such good relations it is not possible to run any business. Therefore, the expenditure is rightly allowable as revenue expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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