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TMI Blog2014 (12) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 65(66b) of the Act but is excluded therefrom in view of exclusion of permanent transfers from the ambit of the sub-clause. - On a prima facie construction of the terms of the agreement read as a whole and a holistic construction of its conditions and covenants, the conclusion is compelling that there is a permanent transfer of intangible goods, from the Swedish entity to the petitioner. Therefore the transaction falls outside the ambit of Section 65(55b)(a) of the Finance Act, 1994, since only a temporary transfer of Intellectual Property is comprehended within the meaning of sub-clause (a) i.e., Intellectual Property Right and the agreement between the parties discloses not a temporary but a permanent transfer. - Strong prima facie c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd China and that the petitioner shall not directly or indirectly manufacture products and sell the product to any other party in India and China. This clause also preserves a liberty to the Swedish entity, its wholly owned subsidiaries or joint ventures in which Solna directly has more than 50% of the share, to sell or operate in territories authorised to the petitioner. Paragraph 5 deals with the consideration covered by the agreement and clearly discloses that the consideration specified is for sale of the technical drawings to the petitioner. The terms of payment are set out in the said paragraph. Paragraphs 6 and 7 set out certain clauses regarding commercialization and indemnities agreed between the parties. Paragraph 9 of the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth Limited (supra) on the specific transaction therein and the consequent conclusion thereof, does not amount to a ratio having a precedential value. 6. On the prima facie view of the agreement dated 20-12-2006, relevant to the case on hand, we notice that no element of temporality, either in inherence of title in the technical drawings in favour of the petitioner nor in the period for which the petitioner may beneficially use the know-how pursuant to the permanent transfer of technical drawings nor in the extent of the rights to use the technical know-how is evident. The agreement clearly and exclusively transfers permanently the technical drawings. Therefore, the transaction prima facie falls more appropriately within the ambit of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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