COMMISSIONER OF INCOME TAX Vs. KIRLOSKAR TRACTORS LIMITED

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income -tax Act, 1961, the Income -tax Appellate Tribunal has referred the following three questions of law to this court for opinion at the instance of the Revenue : '1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the liability to pay the entire amount of DM 1,40 millions did not arise on the execution of the agreement and that it arose only in the account period?

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the liability for the payment of technical know -how fees accrued at the stated intervals as per Clause (i) of the agreement and arose only when the permission of the Reserve Bank of India was received?

(3.) HOWEVER , in the next assessment year, viz., assessment year 1975 -76, the Income -tax Officer, by his order of assessment dated 17th February, 1978, allowed deduction of Rs, 16,99,346 being the amount paid by the assessee in that year to its foreign collaborator 'Deutz' in terms of the collaboration agreement dated 29th June, 1970. But the Commissioner of Income -tax, in exercise of his suo motu power of revision under Section 263 of the Act, revised the order of the Income -tax Officer and directed the Income -tax Officer to withdraw the deduction allowed by him and recompute the loss in that year accordingly. Against the above revisional order of the Commissioner for the assessment year 1975 -76, the assessee appealed to the Tribunal.