C.I.T. Vs. BRITANNIA INDUSTRIES LTD.

JUDGEMENT

(1.) The appeal is directed against a judgement and order dated 19th May, 2006 passed by the learned Income Tax Appellate Tribunal pertaining to the assessment year 1998-1999. The revenue has come up in appeal. The following questions were formulated at the time of admission of the appeal:-

(2.) In so far as the first question is concerned the undisputed facts and circumstances are that four several machines were developed by the assessee at a cost of Rs.46,26,552/-. However, after the machines were developed the assessee found that the technology used had already become obsolete. Therefore, the machines were not put to use of manufacturing purposes.

(3.) The assessee decided not to sell the machine as a scrap because doing so might enable the competitors to know technical knowhow developed by the assessee. Therefore, they decided to use the parts of the machines so developed by way of spare parts in future. This explanation was not acceptable to the assessing officer. He was of the opinion that the claim was not allowable for the following reasons:-