Commissioner of Income Tax vs Toshniwal Electrodes Mfg. Co.

T.D. Sugla, J.—The Tribunal has referred one question each at the instance of the assessee and the Department in this case. The questions read thus

(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in not holding that the technical know-how fees paid to the foreign collaborators was a revenue expenditure ?

(ii) If the answer to question No. (i) is in the affirmative, then whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the technical know-how contained in a book form by way of numerical diagrams, data, formula and detailed instructions, as plant within the meaning of sections 43(3) and 32 of the Income Tax Act, 1961, and, accordingly, the assessee is entitled to depreciation on the price paid for it ?"

Counsel are agreed that in view of the Supreme Court decision in Scientific Engineering House (P) Ltd. Vs. Commissioner of Income Tax, Andhra Pradesh, , the second question must be answered in the affirmative and in favour of the assessee. In view of this, Shri Inamdar does not want to press the first question which was referred to this court by the Tribunal at the instance of the assessee. Accordingly, the second question is answered in the affirmative and in favour of the assessee and the first question is returned unanswered. No order as to costs.