TMI Blog1982 (7) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... t "), at the instance of the Revenue is as follows: " Whether, on the facts and in the circumstances of the case, the payment of the sum of Rs. 1,20,250 by the assessee to Westinghouse Electric International Co. is an expenditure of a revenue nature, and is allowable as a deduction in computing the total income of the assessee ? " The assessee-company entered into a licence and technical assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Performance specifications. (e) Purchasing specifications. (f) Test data. The only material clause for the purposes of this reference is the clause regarding the first payment to be made by the licensee as consideration for the licences, information, rights and services granted, furnished and rendered and to be granted, furnished and rendered by the technical adviser. Clause (a) reads as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information, rights, etc. Following the decision in CIT v. Ciba of India Ltd. [1968] 69 ITR 692 (SC), the orders of the ITO and the AAC were set aside and the expenditure was held to be of revenue nature. The correctness of this view is put in issue in the question referred and reproduced earlier. Mr. Joshi on behalf of the Revenue has contended that the payment of $ 25,000 was the first paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been considered by this court in CIT v. Tata Engineering Locomotive Co. (P.) Ltd. [1980] 123 ITR 538. It has been pointed out in that case that technical know-how and technical advice cannot be treated as a capital asset and merely because the assessee who had entered into a contract with regard to know-how is entitled to use the know-how even after the agreement has expired, it does not mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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