9911796707
TMI Blog1984 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a revenue nature allowable in the computation of the assessee's income for each of the assessment years 1968-69 and 1969-70 ?" The other question which was referred at the instance of the assessee is as follows : "Whether the sum of Rs. 1,02,852.70 paid by the assessee to the company up to December 31, 1966, under the agreement dated May 19,1964, was to be treated as part of the actual cost of the plant and machinery qualifying for depreciation thereon for the assessment years 1968-69 and 1969-70 ?" The facts giving rise to the reference can be stated shortly, as there is no serious dispute regarding the decision of the questions referred before us. The assessee is a limited company. The assessment years are the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for developing and manufacturing on the most efficient and economical basis the maximum possible output of such P.I.V. gears. It was also provided that the said U.K. company would provide complete and detailed drawings, designs, data information and advice to the best of the U.K. company's own practical experience and knowledge of the most efficient methods and processes. It was further provided in the said agreement that the said U.K. company would give facilities for training at the said U.K. company's English plants and establishment of such employees of the assessee as might be deputed by the assessee limited to the maximum number of trainees provided for in the said agreement. A sum of pounds 5,000 was paid by the assessee to the U.K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive Co. Pvt. Ltd. [1980] 123 ITR 538 (Bom). It was held in that case on the facts therein that in essence, the agreements were for acquiring technical information regarding methods of production and the assessee had not acquired any asset or advantage of an enduring nature for the benefit of its business. The amounts paid for the provision of know-how and licence to use the trade name were revenue expenditure. It was further held that the expenditure incurred on such training was closely related to the profit-earning process and was allowable as revenue expenditure. We find that in the case before us also, the said agreement dated May 19, 1964, was for the purpose of acquiring knowledge regarding methods of production of P.I.V. gears and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
