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Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Alloability of - Whether payments made by assessee-company under certain collaboration agreements for acquisition of technical know-how are permissible revenue deductions - Held, yes FACTS The assessee-company entered into several collaboration agreements for the acquisition of technical know-how. In the relevant assessment years, the Tribunal accepted the assessee's claim that the payments in respect of the said agreements were revenue expenditure in nature and, thus, were permissible deductions. On reference: HELD Following the decisions in Kirloskar Pneumatic Co. Ltd. v. CIT [1982] 136 ITR 746 (Bom.) and inCIT v. Tata Engg. & Locomotive Co. Ltd. [1980] 123 ITR 538 (Bom.), it had to be held, in the present case, that the aforesaid payments made by the assessee were permissible revenue deductions. CASE REVIEW CIT v. Tata Engg. & Locomotive Co. (P.) Ltd. [1980] 123 ITR 538 (Bom.) and Kirloskar Pneumatic Co. Ltd. v. CIT [1982] 136 ITR 746 (Bom.) followed and relied upon. CASES REFERRED TO: Kirloskar Pneumatic Co. Ltd. v. CIT [1982] 136 ITR 746 (Bom.), CIT v. Tata Engg. & Locomotive Co. (P.) Ltd. [1980] 123 ITR 538 (Bom.) and Fenner Woodroffe & Co. Ltd. v. CIT [1976] 102 ITR 665 (Mad.). G.S. Jetley and Miss S.G. Shah for the Applicant. S.N. Inamdar for the Respondent. JUDGMENT Kania, Actg. CJ. - These six references under section 256(1) of the Income-tax Act, 1961 ('the Act') arise on a common statement of the case. The questions referred to in the said references are substantially similar. In these circumstances we propose to dispose of these references by this common judgment. 2. Kirloskar Bros. Ltd., which is regarded as the parent company of the assessee-company, carried on business, inter alia, of manufacturing air compressors since its incorporation in 1928. In 1958, Kirloskar Bros. Ltd. considered it desirable to carry on the said business by floating a new company, namely, the assessee-company. The assessee-company was, therefore, formed in 1958 with the main object of manufacturing industrial engineering products. It started with the production of air compressors,…

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