TMI Blog1978 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... Works, is a registered firm carrying on business, inter alia, in the manufacture and sale of saccharine. On February 6, 1961, it entered into an agreement with Heyden, a West German concern. Under this agreement, Heyden was to transmit to the assessee know-how and data for construction and operation of a plant for the manufacture of saccharine by flow-sheet process. For cession of the know-how an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the purchase price of the technical know-how. The payment was a part payment for the acquisition of the technical knowledge. It was of a capital nature. At the instance of the assessee, the Tribunal has referred for our opinion the following question : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 28,917 constituted an item of revenue expenditure or capital exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the royalty. This was a case of acquisition and not merely user for a limited time. The assessee clearly obtained an advantage of an enduring nature. The payment for its acquisition was clearly capital in nature. Learned counsel for the assessee relied upon Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT (1965] 56 ITR 52 (SC), where the question was as to what was the significance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 692 (SC) is equally distinguishable. There, one of the terms of the agreement was that upon termination of the agreement for any cause, the Ciba company would cease to use the patents and trade marks and return to the Swiss company all copies of information, scientific data or material sent to it. The agreement was for a period of five years for which an annual royalty was to be paid. Here the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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