Approval of agreements for the purposes of section 80MM of the Income-tax Act, 1961-Guidelines regarding - Income Tax - 360/1983

Approval of agreements for the purposes of section 80MM of the Income-tax Act, 1961-Guidelines regarding Circular No. 360 Dated 16/5/1983 Attention is invited to the guidelines contained in sub-para. (vii) of para. 1 of Board's Circular No. 140 dt. 6th July, 1974* See [1974] 95 ITR (St.) 144. The guidelines contained in sub-para. (vii) of para. 1 have since been modified and the revised guidelines contained in this paragraph are as follows:- (vii)(a) where the agreement is for provision of a technical know how which is likely to assist in the manufacture of goods or the processing of materials or in the installation or erection of plant or machinery for such manufacture or processing, the technical know-how provided should be manufacturing/processing technology and/or plant/machinery design and/or installation/erection technology of plant or machinery. (b) Agreements for provision of know-how relating to management organisations, sales, finance and accounts and for market or demand studies will not qualify for approval. (c) Agreements for preparation of feasibility or project reports for the purpose of supporting applications for assistance from financial or other institutions will also not qualify for approval. (d) Agreements for preparation of feasibility or project reports aimed at assessing the techno-economic viability of a project for the purpose of investment decisions will qualify for approval under sec. 80MM only if the objectives for which the report was prepared had matured so far as it relates to qualifying items under section 80MM in the project reports. (Sd.) Joginder Pall Officer on Special Duty (CBDT)