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TMI Blog2017 (9) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... gy Ltd., reported in (1995 (12) TMI 25 - GUJARAT High Court) It is apparent that all factors taken into consideration clearly indicate that it is a revenue expenditure and we do not find any error is committed by the Tribunal in holding that it is covered by Section 37(1) of the Income Tax Act. The substantial questions of law are answered accordingly. The appeals are, therefore, dismissed. - Income Tax Appeal No. 72 -74 of 2002 - - - Dated:- 1-9-2017 - R. K. Deshpande And Manish Pitale, JJ. Anand Parchure with Shri Bhushan Mohta, counsel for Appellant Shri K.P.Dewani, counsel for Respondent JUDGMENT (P.C.) 1] In both these appeals, common substantial questions of law are involved and hence, they are disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 199596 with different amount on the same items. 3] With the assistance of the learned counsels appearing for the parties, we have gone through the orders. We find that no reasons are recorded by the assessing officer to hold that the expenditure incurred in payment to two companies is of capital nature and covered by Section 35AB of the Income Tax Act. The Commissioner, Income Tax (Appeals) as well as the Income Tax Appellate Tribunal have considered the aspect in details and we would like to reproduced the findings recorded by the Income Tax Appellate Tribunal in para 10 of the judgment. 10. A perusal of the aforesaid terms and conditions of the agreement entered into by the assessee company with the concerned parties mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd technology or the technical documentation and drawings from the concerned parties to the assessee as per the said agreement and the assessee company had not acquired any ownership or similar rights in the same 4] Shri Mohta, the learned counsel appearing for the Department has relied upon the decision of the Apex Court in the case of Honda Siel Cars India Ltd. vrs. Commissioner of Income Tax, Ghaziabad, reported in [2017] 82 taxmann.com 212 (SC), wherein the Apex Court has held that the revenue expenditure for acquisition of technical information and knowhow can be categorized as capital expenditure and the contention raised that it should be considered as revenue expenditure has been rejected. 5] There cannot be a dispute about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose which can be culled out from above discussion is that where expenses are incurred in areas which supplement the existing business and is not a fresh or new venture and agreement of acquiring technical knowhow pertain to product already in the line of the established business which was intended to improve the operations of the existing business, its efficiency and profitability from the area of day to day business of the appellant's established enterprise's expenses be treated as revenue and not capital. On the other hand, if the technical knowhow is acquired for the purpose of establishing altogether a new or fresh venture, launching of a new enterprise, the same expenditure may be treated as capital and not revenue. In such cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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