Law:

Section:

Section 80mm of the income-tax act, 1961-Deduction-Royalties, etc., received from any indian concern-Whether agreements for preparing technical or techno-economic feasibility reports for industrial expansion or improvement would come within the ambit of section 80mm-Held, yes, if provision of technical know-how directly assists in manufacture or processing of goods or material or in installation or erection of machinery or plant or other operations specified therein-Held also that where job assigned under an agreement has only a remote relationship with manufacture or transfer of technical know-how, provisions of section 80mm not applicable Facts The petitioner-company was required under an agreement to carry out a study to suggest ways and means by which the life of brick lining in the burning zone of the Unax and Folax kiln should be extended for aluminium and basic bricks, as also to suggest ways and means to avoid dust rushes in the Folax kiln. Two detailed technical reports were accordingly prepared by the company making certain recommendations. [CWP No. 587 of 1974] The petitioner-company was required, under two separate agreements, to submit reports for, (a) improving the performance of a plant right from raw mill up to chinker production and also suggest broadly the improvements to be carried out in the various parts of the plant to attain a sustained output of a specified tonnage, and (b) giving the techno-economic possibilities for converting certain wet process kilns to dry process. The company submitted detailed reports giving certain proposals in the required technical fields. [CWP No. 588 of 1974] The petitioner-company was required under an agreement to prepare the detailed engineering and other drawings for introduction of automatic control of pressure and temperature drops, and other modifications to the existing plant as also other items of work relating to economic aspects, etc. [CWP No. 683 of 1974] The petitioner-company was required to conduct a preliminary feasibility study of raw materials based on information and other analytical data. [CWP Nos. 361 and 589 of 1974] By a non-speaking order in each case, the Board refused to grant…

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