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1 - 10 of 15 (0.58 seconds)Article 23 in Constitution of India [Constitution]
Article 7 in Constitution of India [Constitution]
Article 2 in Constitution of India [Constitution]
Article 3 in Constitution of India [Constitution]
Article 5 in Constitution of India [Constitution]
Alembic Chemical Works Co. Ltd vs Commissioner Of Income Tax, Gujarat on 31 March, 1989
21. As we have observed earlier, when the right was given to the
Indian Company to register the patent right in its name to transfer and
assign the agreement in favour of other company clearly shows that the
intention of the party was for exclusive sale of the know how and not a
mere right to use. If we read the agreement harmoniously, giving reflect to
all the clauses of the agreement, it clearly shows that there was an
acquisition of the technical know-how by the Indian company. Therefore,
in our opinion, the Judgment of the Apex Court in the case of Alembic
Chemicals Ltd. (supra) may not be of any assistance to the Revenue. The
matter would stand on entirely different footing, in case the right of the
Indian company to register the patent in its name as provided in Article
16 ITA.No.491/Hyd/2000
Vesil SPA, Italy, Hyderabad
2.7 and the right to transfer and assign the agreement in Article 5.3 of the
agreement are not there. In view of this specific clauses in Article 2.7 and
5.3 of the agreement with regard to patent right and transfer and assign
the agreement itself, in our opinion, what was transferred to the assessee
is exclusively technical know-how on outright sale.
N.V. Philips vs Commissioner Of Income-Tax (No. 1) on 6 May, 1987
23. We have also carefully gone through the judgment of the
Calcutta High Court in N.V.Philips vs. CIT (1988) 172 ITR 521. In the case
before the Calcutta High Court Netherland Company . entered into an
agreement with an Indian company to furnish technical information
relating to manufacture and sale of vitamin-D. The Indian company has to
pay 5% of the net selling price to the foreign company as consideration.
The assessee contended before the Assessing Officer that the amount
received from Indian company was by way of technical assistance fees. The
Assessing Officer accepted the contention of the assessee and held that
only 10% of the receipt of the foreign company would be treated as taxable
income as the same was towards technical assistance fees. However, the
Administrative Commissioner in exercise of his power under section 263 of
the Income Tax Act, 1961 found that the payment received by the foreign
company was in the nature of 'royalty'. The Tribunal also confirmed the
view of the Administrative Commissioner. In the re-assessment proceeding
pursuant to order under section 263 of the I.T. Act, the Assessing Officer
found that the payment received by the foreign company is nothing but
royalty. In those factual situation the Calcutta High Court found that the
entire payment received by the foreign company for supply of data,
assistance for manufacture of products of the assessee in India on
payment of fixed percentage of net selling price. In those facts and
circumstances, the Calcutta High Court found that what was received by
the foreign company is a 'royalty'. In the case before the Calcutta High
Court there was no separate payment for purchase of technical know how.
The Indian company has to pay 5% on net selling of the Vitamin-D.
18 ITA.No.491/Hyd/2000
Vesil SPA, Italy, Hyderabad