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TMI Blog2008 (8) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... is neither desirable nor possible. Revision dismissed. - - - - - Dated:- 29-8-2008 - PRAKASH KRISHNA , J. PRAKASH KRISHNA J. The applicant, a public limited company, incorporated under the Indian Companies Act, registered under the U.P. and Central Sales Tax Act, a new unit within the meaning of section 4A of the U.P. Trade Tax Act, 1948 has questioned the legality and validity of the order dated May 10, 2000 delivered by the Trade Tax Tribunal in appeal No. 96 of 1999. The facts of the case lie in a narrow compass and not much in dispute. It is an accomplished fact that the applicant applied for and was granted eligibility certificate under section 4A of the Act for manufacturing of four stroke motorcycle. The said unit had entered into an agreement dated 25th of March, 1996 with a new foreign collaboration, namely, Yamaha Motors Company Limited. The agreement was duly approved by the Government of India. In the present revision the only dispute is with regard to the interpretation of fixed capital investment as defined in Explanation (4)(a)(v) to section 4A of the U.P. Trade Tax Act. The contention of the dealer that price or value of know-how shall also be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . . . (b) for the purposes of determining value of plants including captive power plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures only the following shall be taken into account, (i) investment, whether by means of purchase, hire or lease in such plant, equipment, apparatus, components and machinery as is necessary for the establishment or running of the factory or workshop; (ii) investment as is necessary under some statutory obligation; and (iii) expenses incurred in erection and installation of such plant and machinery and bringing it to the site. The crux of the argument of the learned senior counsel is that mere purchase of machinery or factory without know-how as to how run or operate machinery or factory is of no use. According to him, the use of words necessary for establishment or running of the factory or workshop are indicative of fact that the investment made in the know-how is essentially included in the definition of fixed capital investment . In this connection reliance was placed on a decision of the apex court in Scientific Engineering House (P) Ltd. v. Commissioner of Income-tax [1986] 157 ITR 86. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipment, apparatus, components, moulds, dyes, jigs and fixtures, no other item of expense is includible under the head of fixed capital investment for the purposes of section 4A of the Act. 67.. This principle of statutory interpretation is reinforced not only by the particulars itemized in form XLVI of the Rules but also by the procedures for determination of fixed capital investment specified in paragrphs 3 and 4 of the 1991 notification, all of which underscore the definition's restrictive nature. There is and indeed could be no reference either in the form or in the 1991 notification to any item outside the definition in Explanation (4) to section 4A. It has been further elaborated that the underlying object of the scheme of the exemption under section 4A of the Act is to grant the benefit by way of quid pro quo for the actual value of the assets brought into State. The determination of such value would necessarily take an objective exercise. Shri Bharat Ji Agrawal, the learned senior counsel, tries to distinguish it on the ground that the question of investment in know-how was not directly involved therein. He submits that investment made in foreign technician expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jaria Ceramics Ltd. [2005] 141 STC 406 (SC); [2006] UPTC 85 and it was disapproved with reference to the provisions of the U.P. Trade Tax Act in the case of Kajaria Ceramics [2005] 141 STC 406 (SC); [2006] UPTC 85. For the same reason, the third case relied upon by the learned senior counsel has also no application to the facts of the present case. Now, the second point regarding the fixed capital investment made for providing parking space to the officers and the workers of the applicantcompany may be considered. Before the divisional level industrial development authority, constituted under section 4A of the U. P. Trade Tax Act, 1948 it was submitted that a sum of Rs. 12,60,000 has been invested for providing the car parking. The said claim has been denied by the committee concerned and the Tribunal as well. It has been denied on the ground that section 4A of the Act does not envisage any such investment under the above head. The Tribunal rejected the argument put forth by the dealer on the ground that the investment of the said amount towards car parking space is not contemplated within the investment of building and in my view rightly so. It is not the case of the dealer tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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