Calcutta H.C : Whether, on the facts and in the circumstances of the case and on a proper construction of the collaboration agreement dt. December 3, 1960, the Tribunal was right in holding that the payment to R. 1. G. by way of royalty was revenue expenditure deductible in its entirety, in computing the assessee’s business income?

High Court Of Calcutta

CIT vs Bengal Potteries Ltd.

Section 37

Dipak Kumar Sen & Shyamal Kumar Sen, JJ.

IT Ref. No. 405 of 1977

7th April, 1986

Counsel Appeared

N. Bhattacharjee, for the Revenue

DIPAK KUMAR SEN, J.:

On an application of the Revenue under s. 256(1) of the IT Act, 1961, the following question has been referred by the Tribunal as a question of law arising out of its order for the opinion of this Court:

“Whether, on the facts and in the circumstances of the case and on a proper construction of the collaboration agreement dt. December 3, 1960, the Tribunal was right in holding that the payment to R. 1. G. by way of royalty was revenue expenditure deductible in its entirety, in computing the assessee’s business income?”

2. The controversy raised in the said case is covered by a decision of this Court in the case of the same assessee. The said decision is CIT vs. Bengal Potteries Ltd. (1980) 126 ITR 442 (Cal). By the said judgment, the matter was remanded to the Tribunal for taking additional evidence on the issues raised and for disposal of the appeal under s. 260(1) of the IT Act, 1961. Following the said decision, we remand this matter also to the Tribunal for being disposed of under s. 260(1) of the Income-tax Act after taking additional evidence relevant to the dispute as laid down in the said decision and giving a reasonable opportunity to both the parties of being heard.

There will be no order as to costs.

SHYAMAL KUMAR SEN, J.

I agree.

[Citation : 175 ITR 421]

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