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TMI Blog1991 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ferro silicon. For this purpose, he got in touch with some firms in Sweden and also with the Governments of India and Orissa. This was for the purpose of getting technical aid and for obtaining licence, land, power, finance, etc... The assessee got good response from all quarters. As the preparation for setting up of the project advanced, the assessee realised that it would be better to set up the plant under a company and applied for registering company in the name of Messrs. Indian Metal and Ferro Alloys Limited. The company was incorporated on November 20, 1961. On January 22, 1962, the board of directors of the company met and passed a resolution stating, inter alia, as follows : "Shri Banshidhar Panda (i.e., the assessee) has render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negotiations entered into by him. In this arrangement, Shri Banshidhar Panda has neither charged nor will be paid any sum for rendering his services. Resolved that we, the directors of the Indian Metals and Ferro Alloys Limited, hereby approve and ratify this promotional expenditure." The aforesaid payment of Rs. 8,07,448 was credited by the company in its cash book on November 22, 1961, as follows: Rs. (a) Promotional expenditure account being paid towards project reports and design 3,50,000 (b) Other promotional expenditure being paid towards promotional expenditure including fees for technical know-how 4,57,448 ------------------- Total 8,07,448 ------------------- While the assessment was pending, the Voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the case, the Tribunal was justified in treating the income of Rs. 3,50,000 as capital receipt in the hands of the assessee individual ?" At the instance of the assessee, the following questions are before us: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the sum of Rs. 4,57,448 was assessable under section 28 of the Income-tax Act as professional receipt ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in allowing Rs. 1,75,000 only being the expenditure for earning the said amount ?" A reference to the order of the learned Tribunal shows that it relied on the aforequoted resolution of the board of directors and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which Rs. 3,50,000 was paid represented the cost payable towards 'Project reports and designs'. The other part for which Rs. 4,57,448 was paid by the company consisted of 'Promotional expenditure including fees for technical know-how'. The first payment was clearly towards the acquisition of a capital asset. What Dr. Panda sold to the company was a capital asset in his own hands, he being the owner of the project reports and designs, etc., and what the company acquired as a result of the said expenditure was also a capital asset in the hands of the said company. The second payment, however, admittedly included 'fees for technical know-how', apart from other 'promotional expenditure', which he might have incurred, while promoting the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional receipt, no fault can be found with the same as, admittedly, this included "fees for technical know-how" and other promotional expenditure. As to the allowing of expenditure amounting to Rs. 1,75,000 only, no exception can be taken as the assessee himself had admitted before the board of directors that he could produce receipts for about Rs. 2,00,000 only. Of this, Rs. 25,000 was allocated as expenditure incurred in connection with the receipt of capital asset amounting to Rs. 3,50,000. It is settled law that, if the view of a Tribunal on a question of fact be reasonable, it is not admissible to this court in advisory jurisdiction to upset the same merely because this court might have, on the material available on record, come ..... X X X X Extracts X X X X X X X X Extracts X X X X
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