COMMISSIONER OF INCOME TAX Vs. SHRIRAM BEARINGS LTD

JUDGEMENT

(1.) ON an application under S. 256(2) of the IT Act, 1961, the Tribunal has referred the following question for the opinion of this Court :

(2.) THE assessee is a public limited company manufacturing ball-bearings. The assessment year is 1980-81. The assessee entered into an agreement styled "Technical Collaboration Agreement" with M/s Industriework Echsofflar, INA Ingenieur Disast GmbH, Federal Republic of Germany (INA). The agreement provided for the supply of technical know-how, which the INA had already developed, being in the same line of business, for as lump-sum consideration of Rs. 13 lakhs and subject to Indian tax is sold to assessee. According to cl. 7 of the agreement, the lump-sum was to be paid in the instalments as under :

(3.) MR . Agarwal submits that the issue is covered by the decision of the Supreme Court in the case of Jonas Woodhead & Sons (India) Ltd. vs. CIT (1997) 138 CTR (SC) 283 : (1997) 224 ITR 342 (SC) : TC S16.1743. He further submits that the decision relied on by the Tribunal has no application as in that case the assessee was not allowed to use the technical know-how after expiry of the agreement, while in the case in hand the assessee can use the technical know-how, even after the period of the assessment.