TMI Blog1986 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the Incometax Appellate Tribunal was justified in holding that the sum of Rs. 5,000 claimed by the assessee as development expenditure was rightly treated as a capital expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er held that the payment of Rs. 5,000 by the assessee to the aforesaid corporation during the assessment year in question was in the nature of capital expenditure. The Income-tax Officer, therefore, disallowed the claim of the assessee in that behalf. The appeal preferred by the assessee before the Appellate Assistant Commissioner was dismissed. The assessee thereupon filed a second appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company, which has entered into a contract with regard to know-how, is entitled to use that know-how even after the agreement has expired, the benefit must be said to be of an enduring character. Agreement of foreign collaboration where foreign know-how is availed of in lieu of payment is, in our view, in substance, a transaction of acquiring the necessary technical information with regard to te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation supplied after the other party to the agreement has fully equipped itself and made itself familiar with the technical information and know-how supplied. The fact that the production can still be continued after the expiry of the agreement is, therefore, in our view, wholly immaterial for deciding whether such know-how can be treated as a capital asset." We respectfully agree with the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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