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TMI Blog1987 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... angalore Bench, has referred the following two questions for the opinion of this court under section 256(1) of the Income-tax Act, 1961 ("the Act" for short) : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deciding that the revenue expenditure incurred by the assessee in connection with its new divisions is deductible as business expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oning of its six new divisions, the assessee had entered into a collaboration agreement with certain parties and had paid technical assistance fees during the previous year. The Income-tax Officer disallowed the deduction on the ground that the deduction could be given only from the year in which the production commenced. The Appellate Assistant Commissioner accepted the plea of the assessee and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department is about the allowance of technical assistance fees. The Income-tax Officer disallowed it on the ground that production had not commenced during the previous year. Since it has been held that the entire business activity of the company is one and the same, there is no question of starting a new business and production. The decision in this regard follows as a corollary to the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem was capital expenditure. Learned counsel for the assessee, however, relied on the judgment of the Supreme Court in the case of CIT v. Ciba of India Ltd. [1968] 69 ITR 692, in which the Supreme Court held that by securing, under an agreement, the right to draw, for the purpose of carrying on the business as a manufacturer and dealer of pharmaceutical products, upon the technical knowledge made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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