COMMISSIONER OF INCOME TAX Vs. PRAGA TOOLS LIMITED

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal, Hyderabad Bench-A, Hyderabad, referred the following question for the opinion of this court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), arising out of its common order in I.T.A. Nos. 842 to 847 of 1979, dated August 11, 1990, for the assessment years 1967-68 to 1972-73 :

(2.) THE assessee is a public limited company, engaged in the manufacture of precision machine tools. THE assessee-company entered into collaboration agreements with foreign companies for technical know-how in the form of designs, drawings, etc., in respect of certain machines manufactured by it.

(3.) LEARNED counsel for the assessee, on the other hand, supported the order of the Income-tax Appellate Tribunal, though not on the merits of its finding with reference to the action of the Appellate Assistant Commissioner under Section 154, but on the merits of the issue in the light of the subsequent decision of the Supreme Court, wherein it was held that technical know-how such as drawings, designs, plans, processing data, etc., can be treated as "book" and constituted plant within the terms of Section 43(3) of the Act. In the light of the said later decision of the apex court on the merits of the matter, this court need not go into the other technical aspects and therefore instead of answering the question in favour of the Revenue and directing the parties to re-agitate the issue on the merits, the issue could as well be answered in favour of the assessee on the merits of the matter. LEARNED counsel did not seriously contest the finding of the Appellate Tribunal in so far as the powers of the Appellate Assistant Commissioner in rectifying the order, when a binding decision of the jurisdictional High Court is brought to his notice, which he failed to consider while disposing of the appeals originally.