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TMI Blog1986 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection with income-tax assessment year 1980-81 : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the expenditure of Rs. 1,15,000 incurred by the assessee on acquisition of technical know how is not capital expenditure ? " We have heard learned standing counsel. We are unable to accept his contention that the expenditure i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the assessee with M/s. Ventra Engineering Company, a sum of Rs. 1,15,000 was paid during the accounting year relevant for the assessment year 1980-81 towards fees for supply of drawings, designs and supervision of the manufacture of locomotives manufactured by the assessee. The question for consideration was whether the sum of Rs. 1,15,000 paid by the assessee-company to M/s. Ventra Engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel, the expenditure incurred on the payment of technical collaboration fee consisting of drawings, designs, charts, plans, etc., was capitalised by the company. A claim for depreciation was made before the tax authorities on the expenditure so capitalised. The Revenue declined to grant depreciation on the ground that the drawings, designs, charts, etc., did not constitute " books " so that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motives. It is also not denied that the technical collaboration fee was paid to M/s. Ventra Engineering Company for the purpose of technical information furnished for the manufacture of products. In our opinion, the expenditure incurred by an assessee in obtaining technical information for the manufacture of goods is clearly on revenue account and is governed by the decision of the Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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