Law:

Section:

Section 43(1), read with sections 32 & 33, of the Income-tax Act, 1961 - Actual cost - Assessment year 1963-64 - Assessee company entered into an agreement with it's a foreign collaborator for providing technical know-how for erection of machinery - Whether interest paid on amounts borrowed for purchase of machinery has to be capitalised as part of cost of machinery - Held, yes - Whether since expenses incurred on foreign tours of directors and engineers, had not created any tangible asset and engineers had acquired experience in handling machinery, expenses incurred for learning that technique and for getting that experience would not enhance the value of the machinery purchased - Held, yes - Whether, therefore, not entire tour expenses but only such of those expenses which were directly relatable to selection, inspection and supervision of machinery could be taken to add to cost of machinery - Held, yes - Scheme for purchased of machinery suggested by collaborators was part of technical know-how which collaborators were bound to supply to assessee under terms of agreement - Whether said payment did not relate to actual acquisition of machinery by assessee from foreign manufacturer - Held, yes - Whether payment made to foreign collaboration could not be taken to be a part of cost of machinery and that assessee was not entitled to depreciation and development rebate thereon - Held, yes - Scheme for purchased of machinery suggested by collaborators was part of technical know-how which collaborators were bound to supply to assessee under terms of agreement - Whether said payment did not relate to actual acquisition of machinery by assessee from foreign manufacturer - Held, yes FACTS The assessee-company entered into an agreement with its foreign collaborators for providing the technical know-how. The said agreement provided that the technical know-how will be linked with a free consulting period of 3 years from the date of the agreement a lump sum payment was made to the foreign collaborators as an indemnity for the elaboration of the scheme for transmitting arrangement of their experience and all their assistance. Apart from this the directors of the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492