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TMI Blog2007 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent. JUDGMENT The judgment of the court was delivered by MADAN B. LOKUR, J. - The Revenue is aggrieved by an order dated 30 th May, 2005 passed by the Income Tax Appellate Tribunal, Delhi Bench "F" in I.T. Appeals No.4118 and 4119 (Del) of 2001 relevant for the assessment years 1994-95 and 1995-96. 2. In this appeal under Section 260A of the Income Tax Act, 1961 ("the Act"), we are concerned only with the assessment year 1994-95. 3. The question that has arisen for our consideration is whether the assessee is entitled to depreciation on account of capitalization of engineering service fees paid to a foreign company or whether the assessee is entitled to a deduction under Section 35AB of the Act. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assistance to the assessee for setting up a float gas glass plant in consideration of a lump sum payment of US$ 7.5 million to be paid in three installments. Paragraph 8.2 of the collaboration agreement records that the foreign company would provide supervision services for the erection, commissioning and setting up of the float glass plant by making available personnel and equipment, materials and components suppliers. In so far as the float plant services agreement is concerned, that was intended to provide to the assessee engineering services needed to construct a float glass plant and services needed to provide for future process improvements in the operation of the float glass plant after it begins production on a commercial basis; to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant in consideration of a lump sum fee of US$ 7.5 million. Similarly, after considering paragraph 8.2 of the collaboration agreement, the Tribunal concluded that it deals with erection, commissioning and starting of the float glass plant. 9. On a review of the collaboration agreement, the Tribunal concluded that there was no doubt, and we think that this conclusion is quite correct on the facts of the case, that the payment made by the assessee to the foreign company was only for the purposes of setting up the float glass plant. It appears that bills that were produced by the assessee also indicated that payments were made for services of foreign technicians engaged for the purpose of setting up the float glass plant. All in all, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he collaboration agreement did not relate to the manufacture or processing of goods by the assessee. Consequently, it must be held that the assessee is entitled to depreciation under Section 32 of the Act and not for deduction under Section 35AB of the Act for the expenditure incurred, which was not relatable to the manufacture or processing of goods. 13. The question whether the assessee is at all entitled to depreciation under Section 32 of the Act in respect of a "plant" is not in dispute before us and, therefore, we need not give any finding in this regard except to record that the Tribunal found that the word "plant" in Section 43(3) of the Act is defined in very wide terms and technical know-how in the shape of drawings, designs, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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