INNOVESTMENT IMPEX LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS appeal, preferred by the assessee against the order dated 23rd April, 2004 passed by the Income Tax Appellate Tribunal 'C' Bench Kolkata for the assessment year 1998 -99, was admitted on the following substantial questions of law: - -

(2.) THE facts in brief are as follows: - -

(3.) FOR the sale of the self -developed technical know -how, comprising drawings, designs, manuals, process know -how, etc. the appellant entered into an agreement dated March 29, 1997 ('first agreement' for short) with Truepack. The consideration for the said transfer was agreed at Rs. 59 lakhs out of which a sum of Rs. 15 lakhs was to be paid upon handing over of the drawings and related technical information. The balance sum of Rs. 44 lakhs was payable after the installation and commissioning of the plant and machinery purchased by Truepack from SPBP and trial production. It was agreed between the appellant and Truepack that the plant and machinery so purchased required renovation so as to achieve the stipulated production which could be carried out at a cost of Rs. 28 lakhs. In the event the cost of renovation exceeded the sum of Rs. 28 lakhs, such excess was to be funded by the appellant and treated as a loan by the appellant to Truepack carrying interest @18% per annum repayable within a period of three years. The first agreement further provided that on request the appellant would depute a technical person for providing supervision, guidance and assistance in areas pertaining to manufacture and also to guide, assist and train the staff of Truepack for a separate consideration including the expenses for travel, lodging and boarding of such person.