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Documents citing Scientific Engineering House (P) Ltd vs Commissioner Of Income Tax, Andhra ... on 1 November, 1985

Metakaps Engineering & Mahendra ... vs Cit 18, Mumbai on 11 September, 2017

We are afraid that in the case of the present assessee, though the CIT had placed on record the reply of the assessee in respect of the issues on which the order passed by the A.O was sought to be revised and had also referred about the same in the body of his order passed under Sec. 263, however, neither any reason had been given by the CIT, nor it can be gathered from the impugned order, as to why the explanation P a g e | 20 ITA No.2895/Mum/2014 M/s Metacaps Engineering Vs. CIT of the assessee that the order passed by the A.O was not erroneous and prejudicial to the interest of the revenue on the issues on which it was sought to be revised, was not found to be acceptable. We may clarify that though there is no doubt that the jurisdiction to revise the order passed by the A.O remains within the exclusive domain of the jurisdiction of the CIT, but however, the internal safeguard provided by the legislature by affording an opportunity of being heard to the assessee would fail if the explanation/objections raised by the assessee during the course of such proceedings, therein demonstrating that the order of the A.O is not erroneous and prejudicial to the interest of the revenue are not judicially considered and brought to a logical end by the CIT. We would not hesitate to observe that despite the fact the assessee had during the course of the revisional proceedings placed on record irrebutable material which inescapably established that the order of the A.O was not erroneous and prejudicial to the interest of the revenue in respect of certain issues on which the same was sought to be revised, however, the same did never see the light of the day and except for forming part of the record and finding a mention in the order passed by the CIT u/s 263, were however as a matter of fact never deliberated upon and brought to a logical end by the CIT. We are of the considered view that in the backdrop of the explanation/objections filed by the assessee during the course of revisional proceedings in respect of certain issues on which the CIT had sought to revise the order passed by the A.O under Sec. 143(3), the CIT had failed to point out as to how the order of the A.O was found to be "erroneous".
Income Tax Appellate Tribunal - Mumbai Cites 17 - Cited by 7 - Full Document

The Income Tax Officer vs Adani Port Limtied on 4 May, 2007

29. So far as provisions of Section 32 of the Act are concerned, its clear that the tangible assets have been made entitled to depreciation only w.e.f. 01/04/1999 and if strict interpretation of these provisions is considered, the assessee may not be entitled to depreciation also, but for the decisions in the case of Scientific Engineering House Pvt. Ltd., v. CIT 157 ITR 86 [SC], wherein the Hon'ble Supreme Court has specifically held the technical know-how to be plant and of depreciable Mature, we are of the opinion that the assessee is entitled to depreciation at the rate applicable to Plant & Machinery for such type of business.
Income Tax Appellate Tribunal - Ahmedabad Cites 14 - Cited by 0 - Full Document

Goodyear India Ltd. vs Income Tax Officer. (Asstt. Cit V. ... on 31 January, 2000

10. Then the learned Accountant Member considered the question whether the expenditure of Rs. 16,42,205 being the lump sum amount for technical know-how payable to the Goodyear Tyre & Rubber Co., U.S.A. by the assessee could be treated as revenue expenditure or not. He observed that since the assessee was already engaged in manufacturing tyres, the obtaining of technical know-how for manufacturing of improved variety of tyre i.e., radial tyre could not be treated as setting up of new business which did not require any new plant and machinery but only needed a change in the technical composition. The know-how obtained for manufacture of radial tyres was thus meant for improvisation of the existing products. In this connection, he referred to the Tribunal order in assessee' own case in asst. yr. 1984-85, wherein expenditure of Rs. 55,15,730 being the amount of consideration paid to Goodyear Tyre & Rubber Co. for providing technical know-how of manufacture of extra large OTR tyres, was treated as revenue expenditure, after the consideration of Supreme Court's decisions in CIT vs. Ciba of India Ltd. (1968) 69 ITR 692 (SC), Alembic Chemical Works Co. Ltd. vs. CIT (1989) 177 ITR 377 (SC), Scientific Engg. House (P) Ltd. vs. CIT (1986) 157 ITR 86 (SC) and Jonas Woodhead & Sons (India) Ltd. vs. CIT (1997) 224 ITR 342 (SC). That agreement did not have any significant difference with the present agreement. The only new common thing in asst. yr. 1986-87 which was not present in asst. yr. 1984-85 is s. 35AB, which was inserted with effect from asst. yr. 1986-87. However, since it had already been held by the learned Accountant is above, that s. 35AB did not adversely effect that allowability of revenue expenditure on technical know-how under s. 37(1), even the presence of s. 35AB in asst. yr. 1984-85 would have made no difference.
Income Tax Appellate Tribunal - Delhi Cites 94 - Cited by 58 - Full Document

Landbase India Ltd., Gurgaon vs Dcit, New Delhi on 26 August, 2019

In SCIENTIFIC ENGINEERING HOUSE (PVT.) LTD. v. COMMISSIONER OF INCOME TAX, ANDHRA PRADESH [1986] 157 ITR 86X (SC) Honorable Supreme court has held that that "plant" was not necessarily confined to an apparatus, which was used for mechanical operations or process or was employed in mechanical or industrial business. But in order to qualify as "plant", the particular article had to have some degree of durability. The test to be applied was: Did the article fulfill the function of a plant in the assessee's trading activity? Was it a tool of his trade with which he carried on his business? If the answer was in the affirmative, it would be a "plant".
Income Tax Appellate Tribunal - Delhi Cites 104 - Cited by 0 - Full Document

Outotec Gmbh, Kolkata vs Assessee on 16 June, 2015

32. The revenue authorities has asked assessee to explain as to why the revenue sale of design and drawing made by the Company in the FY 2009-10 should be considered as non-taxable, where, as per the various contracts in respect of the above mentioned services, the ultimate ownership of the designs and drawings are never passed to the buyer, and only license to use the same is granted. In this way, the true nature of the receipts are Royalties under section 9(1)(vi) of the Income Tax Act, 1961 and Article 12 of India-Germany DTAA rather than Sale of designs and Drawings as a product. It was explained that the nature of retaining intellectual property in designs and drawings, due to which the ownership has never passed on to the buyer, is similar in nature to the retaining of patented rights in any goods / machinery. For example, if any customer purchases a car, in that case, the company 42 ITA No.431-432/K/2014 & 283/K/2015 Outotec GmbH AYs 2010-11 & 2011-12 does not transfer its patent or intellectual property to the buyer of the car but that does not change the nature of the transaction from sale of a product to use of a patent/intellectual property. Similarly, restriction on the intellectual property in designs and drawings sold by the assessee for the purpose of setting up a plant in India does not change the character of the transaction from the sale of the product to the use of license/know-how and the mere fact that the word license has been use in the agreement would not make any difference. The assessee explained that the design and drawings sold by it were used by the Indian customers for internal business purpose of setting up of their plants and not for any commercial exploitation. Accordingly, the designs and drawings sold by the assessee tantamount to the use of a 'copyrighted article' rather than use of a 'copyright' and is therefore in the nature of business income. Reliance in this regard is also placed on Commentary on Double Tax Conventions by Klaus Vogel. The relevant extract is reproduced below:
Income Tax Appellate Tribunal - Kolkata Cites 31 - Cited by 0 - Full Document

Dy. Cit vs Sarabhai Piramal Pharmaceuticals Ltd. on 27 January, 2006

30. Without prejudice to the above contentions, the learned Counsel for the assessee submitted that the expenditure on trademark falls within the definition of plant and, therefore, the assessee is entitled to depreciation under Section 32 of the Income Tax Act. In this regard it was contended that since the trademark was acquired by the assessee for unlimited period for its utilization it resulted into an enduring benefit to the assessee which lies in the capital field. Expenditure on trademark provides the assessee a too of its trade with which he carried on his business. He placed reliance upon the judgment of Scientific Engg. House (P) Ltd. v. CIT in support of his above proposition.
Income Tax Appellate Tribunal - Mumbai Cites 47 - Cited by 6 - Full Document

Niraj Petrochemicals Ltd. vs Income Tax Officer on 20 August, 1999

No doubt, it is true, the Supreme Court in the case of Scientific Engineering House (P) Ltd. vs. CIT (1986) 157 ITR 86 (SC) and the Andhra Pradesh High Court in the case of the very same assessee Scientific Engineering House (P) Ltd. vs. CIT (1984) 148 ITR 171 (AP) and the Tribunal Hyderabad Bench 'A' in the case of Klayman Porcelains Ltd. vs. ITO (1985) 21 TTJ (Hyd) 283 : (1984) 8 ITD 265 (Hyd) have held that technical know-how acquired by an assessee is also an asset and falls within the expression 'plant' eligible for depreciation. The Supreme Court held that documentation service comprised of drawings, designs, plans, processed data, etc. in a book form constitutes 'plant' and, therefore, it is eligible for depreciation. There can be no dispute regarding the proposition. A part of basic engineering delivered in the form of designs, drawings, data sheets, plans, etc. may answer the description of a 'plant'. The disbursement in the hands of the Indian company may be capital in nature and the corresponding receipts in the hands of the foreign company may be revenue in nature. It may be a capital disbursement insofar as the purchaser is concerned, but it does not necessarily mean that it would be capital receipt in the hands of the recipient. The foreign company rendered services by preparing the design and basic engineering including documentation and delivered the same to the appellant to enable the latter to erect a plant for the manufacture of maleic anhydride by using the "licensor's process". The said services insofar as the foreign company is concerned are certainly in the nature of "technical services" rendered by it and the receipt of consideration by the foreign company would be chargeable to tax under s. 9(1)(vii) r/w Expln. 2 and art. VIIIA of DTAA. There is no conflict between the DTAA and the IT Act regarding the definition of the expression "fees for technical services".
Income Tax Appellate Tribunal - Hyderabad Cites 67 - Cited by 4 - Full Document

Commissioner Of Income-Tax vs Mineral Mining Company Pvt. Ltd. on 10 June, 1991

5. We now proceed to consider whether the provision in the agreement under clause 4 to furnish to the Corporation a copy of the prospecting report obtained by the assessee, would be in the nature of a plant or tool, so as to enable the assessee to contend that the receipt by the assessee comprised both revenue and capital receipt and should be apportioned. We have carefully gone through the prospecting report which forms annexure 'D' to the stated case and we are unable to share the view taken by the Tribunal that it constitutes a blue-print for commencing mining operations. We find that the report which was only in the nature of a preliminary prospecting report submitted to the Government, pursuant to the prospecting licence, for the purpose of enabling the assessee and the Government to ascertain the availability of minerals in the area and to apply for and grant a licence cannot form the basis of the actual business activities of exploitation of minerals, either by the Corporation or even by the assessee. We also find from the report that only after undertaking drilling and pitting operations and completing them, a complete and comprehensive idea could be gathered regarding the mineral potentiality of the tract and, therefore, the report cannot be considered to be either a plant or a tool In any even, the prospecting preliminary report, which is neither complete nor comprehensive, cannot be regarded as technical know-how on the basis of which it can be stated that the assessee had parted with a capital asset for consideration. We also find that the prospecting report had been obtained with a view to justify the making of an application by the assessee for the grant of a mining lease in its favour. We are, therefore, unable to accept the contention of learned counsel for the assessee that the prospecting report would be a capital asset in the nature of a plant or a tool. We may also observe that, in the decision relied on by learned counsel for the assessee reported in Scientific Engineering House P. Ltd. v. CIT , it had been found that the supply of documents was to enable the assessee to undertake its trading activities of manufacturing theodolites and microscopes and the documents performed a vital function in the manufacture of those instruments and that the assessee commenced its manufacturing activities on the basis of the documents. On a consideration of the contents of the prospecting report in this case, it cannot be regarded as technical know-how at all with the help of which the business or trading activity of mining operations could be commenced.
Madras High Court Cites 12 - Cited by 5 - Full Document

Ms. Innprint And Others vs State Of Odisha And Others on 13 January, 2017

43. Much reliance has been placed on judgment of the apex Court in Scientific Engineering House (P) Ltd. V. Commissioner of Income Tax, Andhra Pradesh, (1986) 1 SCC 11 wherein, while answering the question of -51- acquisition of depreciable assets under the Income Tax Act, the definition of "book" has been taken into consideration, taking into account the dictionary meaning of that word. But, the context of using the word "book" in the said judgment has no application to the present case.
Orissa High Court Cites 25 - Cited by 2 - V Saran - Full Document
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