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TMI Blog1993 (3) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... scale industries in the State. It is a Government company. We were informed that 95% of the shares are held by the Government. The assessment year involved is 1983-84, for which the relevant accounting year is calendar year 1982. 2. In the year 1968 the assessee undertook a new project for manufacture of scooters. The technical know-how for said manufacture had not been acquired by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow would be a revenue receipt and not capital receipt. He accordingly brought the said amount to tax. His attention was drawn to the decisions in the cases of CIT vs. Ralli Wolf Ltd. (1983) 32 CTR (Bom) 79 : (1983) 143 ITR 720 (Bom) and CIT vs. B.C. Srinivasa Setty (1981) 21 CTR (SC) 138 : (1981) 128 ITR 294 (SC) but he distinguished those decisions. The CIT(A), on the other hand, held that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the paper book it is clear that the production had started in 1970. In that year 21 scooters were manufactured. In 1972 100 scooters were manufactured. Thereafter there was lull in the manufacturing activity but from 1975 the manufacturing activity got momentum. The technical know-how is obviously a capital asset. The price realised on sale of capital asset would be a capital receipt. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt. 6. It is to be noted that in the present case provisions regarding capital gains were not attracted because transfer is to the wholly owned subsidiary and hence exemption provisions under s. 47(iv) would be applicable. It is for this reason that the Assessing Officer has not sought to tax this item by way of capital gains. The provisions regarding capital gains would also not be attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal assets of the scooter manufacturing division. The amount has not been received for rendering any services to the transferee. The amount has been received for unconditional transfer of the technical know-how. In fact, under the agreement the assessee was debarred from pursuing similar activity. In the circumstances there could be no doubt on the point that the amount received by the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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