Law:

Section:

Section 256(2) of the income-tax act, 1961-Reference-Question of law-Whether where tribunal had recorded its findings and applied principles of law laid down by supreme court, any question of law was referable-Held, no Facts Keeping in view various clauses of a collaboration agreement between the assessee-company and a foreign company, the Tribunal recorded its findings in regard to payments made by the assessee-company and applied the principles of law in connection with revenue expenditure vis-a-vis capital expenditure as laid down by the Supreme Court in the case of CITv. Ciba of India Ltd. [1968] 69 ITR 692 to such payments. In this context, the Tribunal held that the questions of law sought to be referred to the High Court were merely academic and rejected the revenue's application for reference. On further application under section 256(2), the revenue contended that the construction of various clauses of the collaboration agreement was itself a question of law. Held In view of the Supreme Court's decision in CIT v. Indian Mica Supply Co. (P.) Ltd. [1970] 77 ITR 20, no question of law was referable. Cases referred to CIT v. Indian Mica Supply Co. (P.) Ltd. [1970] 77 ITR 20 (SC), CGT v. Smt. Kusumben D. Mahadevia [1980] 122 ITR 38(SC) and CIT v. Ciba of India Ltd. [1968] 69 ITR 692 (SC). Judgment 1. These are applications under section 256(2) of the Income-tax Act, 1961 ('the Act'). 2. The Tribunal Patna Bench 'B', has rejected the application of the revenue under section 256(1) on the ground that the question of law raised by the department was merely academic in nature. 3. There was an agreement between the assessee on the one hand and a Japanese firm, namely, Yodagawa Steel Works Ltd., on the other. The assessee is functioning in collaboration with the aforesaid Japanese firm. After setting out the relevant clause of the agreement, the Tribunal recorded its findings in these terms: "It is clear that the assessee by virtue of payment under clause 22A acquired the knowledge for know-how in order to make the rolls accurately, quickly and efficiently as they are manufactured by the Japanese firm. Clause 22B only refers to the payment for use and services of…

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