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33. In the present case, the assessee acquired only a right to use the know-how by virtue of a sub-licence granted under a contract between the assessee and the Italian company. I fail to understand as to what else the assessee acquired besides the right to use. It has not acquired the ownership of the know-how, as the preamble of the contract makes it clear that the same is owned by INCA International S.P.A., Italy. Further, the preamble also makes it clear that the sub-licensor has the right to sub-licence the technical know-how. No similar right has been acquired by the assessee under the contract. The other relevant clauses of the contract also do not mince words and are in conformity with the main object of the contract that the assessee has only the right to use the know-how and nothing beyond it.

The above article, it was submitted, placed the assessee in a strong position than merely acquiring the right to use the know-how, and in particular art. 12.2 placed the assessee in a much stronger position after 10 years which fact according to the learned counsel, placed the assessee somewhere in between box one and two as referred to earlier in para 22.

38A. I am afraid, the contention of the learned counsel has not convinced me. By virtue of art. 12 also, the assessee has acquired nothing more than a right to use the know-how. It is only after the expiration of the term of contract as per art. 12.1, the assessee acquires fully paid-up right to continue the product. Hence, before that it does not possess any right fully except to use the know-how under the terms of contract for which the impugned payment, as mentioned in para 3 of the order of my learned brother, is to be made.

3.2. The learned A.M. further noted that the main thrust of the learned counsel was that it was not merely the right to use process that the assessee acquired but there was something more than that and according to him a bundle of rights had been acquired by the assessee. He considering the meaning of the term "Licence" as given in T.P. Mukerjee's Law Lexicon Vol. 2 (1982 Ed.) and P. Ramanatha Iyer's Law Lexicon (1997 Edn.) and referring to art. 2 of the contract agreement observed that the assessee acquired only a right to use the know-how by virtue of a sub-licence granted under the contract between the assessee and the Italian company and nothing more than that was acquired. The assessee has not acquired the ownership of the know-how as the preamble of the contract makes it clear that the same is owned by INCA International S.P.A. Italy and the sub-licensor has only the right to sub-licence technical know-how. The assessee has not acquired similar rights under the contract.

3.5. As regards the claim that as per art. 12 of the contract agreement the assessee-company would acquire full right to use the technical know-how after the expiry of ten years, the learned A.M. has observed that the assessee company has acquired nothing more than a right to use the know-how and it is only after the expiration of the terms of contract that the assessee-company would acquire fully paid-up right to continue the product only.

3.6. On these considerations, the learned A.M. upheld the order of the CIT(A).