COMMISSIONER OF INCOME TAX Vs. LUMAX INDUSTRIES LTD

JUDGEMENT

(1.) THE Revenue is aggrieved by an order dated 12th May, 2006 passed by the income Tax Appellate Tribunal, Delhi Bench "b" in ITA Nos. 3575/del/1998, 602 and 603/del/1999, 4460/del/2000, 3270/del/2001 and 3656/del/2002 relevant for the Assessment Years 1994-95 to 1999-2000.

(2.) THE Assessee is in the business of manufacturing headlights of motor vehicles since some time in 1945. The Assessee has its own factory and own machinery but with a view to increase its efficiency and profitability it entered into an Agreement with M/s. Stanley Electric Co. Ltd. (SECL) sometime in 1984.

(3.) THE Agreement has been annexed to the memorandum of appeal and we have been taken through some relevant clauses of the Agreement, particularly clauses 2, 3 and 4 thereof. Under Clause 2 of the Agreement, SECL grants to the Assessee a non-exclusive right and license to manufacture the licensed products of SECL which are patented and also to receive technical information. Article 3 deals with technical assistance which is to be provided by SECL to the Assessee and includes assistance in relation to the licensed products from time to time such as technical information, technical advise and dispatch of technical personnel to advise and assist the Assessee. Article 4 deals with the consideration and expenses that have to be incurred by the Assessee towards the license fee, royalty charges and payments to be made for technical assistance including technical personnel and their stay, etc.