S.C : The expenditures were incurred to obtain benefit of research and development made by the foreign company. The technical information given to the Indian company was “non-exclusive” and “nontransferable”

Supreme Court Of India

CIT vs. Wavin (India) Ltd.

Section 37(1)

S.C. Sen & S. Saghir Ahmad, JJ.

Civil Appeal Nos. 4912 of 1992 and 240 to 242 of 1986

3rd September, 1997

Counsel Appeared

Ranbir Chandra, B.K. Prasad, Nagpal & P. Parmeshwaran, for the Appellant : Ms. Janaki Ramachandran, for the Respondent

JUDGMENT

By the court :

We have perused the order of the Tribunal and the High Court. We are in agreement with the reasons given by the High Court for holding the expenditure to be of revenue nature. The expenditures were incurred to obtain benefit of research and development made by the foreign company. The technical information given to the Indian company was “non-exclusive” and “nontransferable”. In other words, this is not an out and out sale of technical know-how. The assessee was merely given a non-exclusive and non-transferable right of user of the technical information. Expenditures in these facts cannot be said to be for acquisition of any asset at all.

The appeals are, therefore, dismissed with no order as to costs.

[Citation: 236 ITR 314]

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