The ITO,(Intn.Tax.), Baroda V. Heubach Colour Pvt.Ltd., Ankleshwar

ITA 489/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85619 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Recovery proceedings; Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI, ACCOUNTANT MEMBER. ITA.NO.489/AHD/2013 (ASSESSMENT YEAR:2007-08) I.T.O. (INTERNATIONAL TAXATION), ROOM NO. 208, AAYAKAR BHAVAN, BARODA APPELLANT VS. M/S. HEUBACH COLOUR PVT. LTD. 9003-9010, PHASE VI, GIDC ESTATE, ANKALESHWAR (GUJ.) PIN 393 002 RESPONDENT PAN: AAACH2578P /BY APPELLANT : SHRI SUBHASH BAINS, CIT D.R. /BY RESPONDENT : SHRI MILIN MEHTA, A.R. !'# /DATE OF HEARING : 07.01.2015 $%& !'# /DATE OF PRONOUNCEMENT : 23.01.2015 I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), GAND HINAGAR, DATED 19.12.2012 FOR A.Y. 2006-07 ON THE FOLLOWING GROUNDS: I) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PURCHASE OF TECHNICAL KNOWHOW CANNOT BE TAXED AS ROYALTY AND PROVISIONS OF SECTIO N 195 OF THE ACT ARE NOT APPLICABLE. II) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PAYMENTS ON TRANSFER OF TECHNICAL KNOWHOW TO BE NOT IN THE NATURE OF ROYALTY IN SPITE OF THE EXPRESS PROVISIONS OF SECTION 9(1)(VI) OF THE I .T. ACT. 2. ASSESSEE IS A COMPANY LIMITED BY SHARES AND CAR RYING ON THE BUSINESS IN INDIA SINCE LAST SEVERAL YEARS. AS SESSEE IS ASSESSED TO TAX WITH ADDITIONAL COMMISSIONER OF INC OME TAX, BHARUCH RANGE, BHARUCH. ASSESSEE IS IN BUSINESS OF MANUFACTURING AND SALE OF COLOUR PIGMENTS AND FINE CHEMICALS. DURING THE YEAR A.Y. 2007-08, ASSESSEE HAD ACQUIRED AVECIA BUSINESS FROM COLOUR LTD. (HEREINAFTER REFERRED AS 'CL'). ASSESSEE PAID FOLLOWING AMOUNTS TO CL CLAIMED TO BE FOR THE INTANGIBLES, TRADEMARKS AND GOODWILL TRANSFERRED TO THE ASSESSEE COMPANY AS UNDER: DATE OF AGREEMENT TYPE OF ASSET AMOUNT US $ AMOUNT INR 31-3-2007 GOODWILL 13,00,000 5,64,20,000 31-3-2007 TRADEMARK 42,50,000 18,44,50,000 I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 3 31-3-2007 TECHNICAL KNOW-HOW 85,00,000 36,89,00,000 TOTAL 1,40,50,000 60,97,70,000 THE STAND OF ASSESSEE BEFORE ASSESSING OFFICER WAS THAT PAYMENT IS FOR OUTRIGHT PURCHASE OF CAPITAL ASSETS BEING INTANGIBLES IN THE FORM OF GOODWILL, TRADEMARK AND TECHNICAL KNOW-HOW. HOWEVER, ASSESSING OFFICER WAS OF THE VI EW THAT PAYMENT IS COVERED BY SECTION 9(L)(VI) OF INCOME TA X ACT, 1961 AND THEREFORE ASSESSEE WAS REQUIRED TO DEDUCT TAX T REATING THE PAYMENT AS ROYALTY. IT WAS THEREFORE TREATED ASSES SEE IN DEFAULT FOR ITS FAILURE TO DO SO. 3. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRANTED RELI EF TO ASSESSEE BY ACCEPTING ITS CONTENTION, WHEREBY IT WAS HELD TH AT PURCHASE OF TECHNICAL KNOWHOW CANNOT BE HELD AS ROYALTY AND PRO VISION OF 195 OF THE ACT IS NOT TECHNICAL. 4. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REV ENUE INTER ALIA SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT PURCHASE OF TECHNICAL KNOWHOW CANNOT BE HELD AS ROY ALTY AND PROVISION OF 195 OF THE ACT ARE NOT APPLICABLE. LD . DEPARTMENTAL REPRESENTATIVE FURTHER ARGUED THAT CIT(A) WAS NOT J USTIFIED IN HOLDING THAT PAYMENT AND TRANSFER OF TECHNICAL KNOW HOW TO BE NOT IN NATURE OF ROYALTY IN SPITE OF EXPRESSION OF PROVISION OF SECTION 9(L)(VI) OF THE ACT. ON OTHER HAND, LD. AU THORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) AND SU BMITTED THAT I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 4 CIT(A) WAS JUSTIFIED IN HOLDING THAT PAYMENT AND T RANSFER OF TECHNICAL KNOWHOW TO BE NOT IN NATURE OF ROYALTY. ACCORDINGLY, SAME SHOULD BE UPHELD. 5. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON RECORD, WE FIND THAT IT IS UNDISPUTED THAT PAYMENT MADE TO M/S. COLOUR LIMITED WAS NOT TAXABLE IN INDIA BECAUSE OF DTAA. ITS CASE IS THAT THE TRANSACTIONS ARE NOT FOR ROYALTY A S DEFINED IN SECTION 9(L)(VI) OF THE ACT. COMPLETE READING OF T HE AGREEMENTS AND CLAUSES THERE UNDER REVEAL THAT ASSESSEE HAD PU RCHASED GOODWILL, TRADEMARK AND TECHNICAL KNOWHOW FROM COLO UR LTD, OUTRIGHT. M/S. COLOUR LIMITED ('SELLER') WAS THE OW NER OF MANUFACTURING PROCESSES, FORMULAE, TRADE SECRETS, T ECHNOLOGY, ANALYTICAL TECHNIQUES, TESTING PROCEDURES, PROCESSE S AND ALL DOCUMENTS AND LITERATURE PERTAINING TO THE MANUFACT URING. THE KNOWHOW RELATING TO THE BUSINESS WAS PURCHASED BY A SSESSEE VIDE AGREEMENT DATED 31-3-2007. THE SELLER HAD SOL D, ASSIGNED, CONVEYED AND TRANSFERRED TO ASSESSEE ITS ENTIRE RIG HT, TITLE, INTEREST AND OWNERSHIP IN THE ASSET. IT WAS ACCORD INGLY AGREED THAT PURSUANT TO EFFECTIVE DATE, THE SELLER SHALL C EASE TO HAVE RIGHT, TITLE, INTEREST AND OWNERSHIP IN THE ASSET. SIMILARLY ASSESSEE WOULD HAVE RIGHT TITLE, INTEREST AND OWNER SHIP IN THE ASSET. WE FIND THE HON'BLE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO LTD V. DIT [2011] 332 ITR 340 (DEL) HAS HELD AS UNDER: 55. KEEPING IN VIEW THE AFORESAID PRINCIPLES, WE N OW EMBARK UPON THE INTERPRETATIVE PROCESS IN DEFINING THE AMBIT AND SCOPE OF TERM ROYALTY APPEARING IN EXPLANATION 2 TO SUB-CLAUSE (VI) OF SECTION 9(1) OF THE ACT. SUB-CLAUSE (I) I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 5 DEALS WITH THE TRANSFER OF ALL OR ANY RIGHTS (INCLU DING THE GRANTING OF A LICENCE) IN RESPECT OF A PATENT, ETC. THUS, WHAT THIS SUB-CLAUSE ENVISAGES IS THE TRANSFER OF 'RIGHT S IN RESPECT OF PROPERTY' AND NOT TRANSFER OF 'RIGHT IN THE PROP ERTY'. THE TWO TRANSFERS ARE DISTINCT AND HAVE DIFFERENT LEGAL EFFECTS. IN FIRST CATEGORY, THE RIGHTS ARE PURCHASED WHICH ENAB LE USE OF THOSE RIGHTS, WHILE IN THE SECOND CATEGORY, NO PURC HASE IS INVOLVED, ONLY RIGHT TO USE HAS BEEN GRANTED. OWNER SHIP DENOTES THE RELATIONSHIP BETWEEN A PERSON AND AN OB JECT FORMING THE SUBJECT-MATTER OF HIS OWNERSHIP. IT CON SISTS OF A BUNDLE OF RIGHTS, ALL OF WHICH ARE RIGHTS IN REM, BEING GOOD AGAINST THE ENTIRE WORLD AND NOT MERELY AGAINST A SPECIFIC PERSON AND SUCH RIGHTS ARE INDETERMINATE IN DURATIO N AND RESIDUARY IN CHARACTER AS HELD BY THE SUPREME COURT IN THE CASE OF SWADESHI RANJAN SINHA V. HARDEV BANERJEE AIR 1992 SC 1590. WHEN RIGHTS IN RESPECT OF A PROPERTY ARE TRANSFERRED AND NOT THE RIGHTS IN THE PROPERTY, THE RE IS NO TRANSFER OF THE RIGHTS IN REM WHICH MAY BE GOOD AGAINST THE WORLD BUT NOT AGAINST THE TRANSFEROR. IN THAT CASE, THE TRANSFEREE DOES NOT HAVE THE RIGHTS WHICH ARE INDET ERMINATE IN DURATION AND RESIDUARY IN CHARACTER. LUMP SUM CONSIDERATION IS NOT DECISIVE OF THE MATTER. THAT S UM MAY BE AGREED FOR THE TRANSFER OF ONE RIGHT, TWO RIGHTS AN D SO ON ALL THE RIGHTS BUT NOT THE OWNERSHIP. THUS, THE DEFINIT ION OF TERM 'ROYALTY' IN RESPECT OF THE COPYRIGHT, LITERAR Y, ARTISTIC OR SCIENTIFIC WORK, PATENT, INVENTION, PROCESS, ETC. D OES NOT EXTEND TO THE OUTRIGHT PURCHASE OF THE RIGHT TO USE AN ASSET, IN CASE OF ROYALTY, THE OWNERSHIP ON THE PROPERTY OR R IGHT REMAINS WITH OWNER AND THE TRANSFEREE IS PERMITTED TO USE THE RIGHT IN RESPECT OF SUCH PROPERTY. A PAYMENT FO R THE ABSOLUTE ASSIGNMENT AND OWNERSHIP OF RIGHTS TRANSFE RRED IS NOT A PAYMENT FOR THE USE OF SOMETHING BELONGING TO ANOTHER PARTY AND, THEREFORE, NO ROYALTY. IN AN OUTRIGHT TR ANSFER TO BE TREATED AS SALE OF PROPERTY AS OPPOSED TO LICENCE, ALIENATION OF ALL RIGHTS IN THE PROPERTY IS NECESSARY.' 5.1 ON THE SIMILAR LINES, HON'BLE CALCUTTA HIGH COU RT HAS HELD IN CASE OF CIT VS. DAVY ASHMORE INDIA, (1991) 190 I TR 626 (CAL.), WHEREIN THE NON-RESIDENT COMPANY DID NOT RETAIN ANY PROPERTY IN THE DESIGNS AND DRAWINGS, AND THE DESIGNS AND DRAWI NGS HAD I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 6 BEEN IMPORTED UNDER INDIA'S IMPORT POLICY AFTER OBT AINING THE PRIOR APPROVAL OF RESERVE BANK OF INDIA. A ROYALTY PAYMENT MUST BE IN RESPECT OF A RIGHT TO USE DESIGNS AND DRAWING S, AND NOT FOR THE PURCHASE THEREOF. THERE IS NO ALLEGATION EVEN T HAT SOME RIGHTS IN THESE PROPERTIES WERE RETAINED BY NONRESIDENT. T HE INCOME IS NOT TAXABLE AS ROYALTY U/S. 9 (L)(VI) OF THE ACT, 1 961. AS REMITTANCE MADE WERE HELD NOT CHARGEABLE TO TAX IN INDIA. IN SUCH SITUATION, PROVISIONS OF SECTION 195 ARE NOT A PPLICABLE. HON'BLE SUPREME COURT IN CASE OF GE INDIA TECHNOLOGY CENTRE P. LTD VS. CIT & ANOTHER (2010) 327 ITR 456 (SC) HELD THAT U/S. 195 PAYER IS BOUND TO DEDUCT TAX ONLY IF THE S UM PAYABLE IS ASSESSABLE TO TAX IN INDIA. ONCE PROVISIONS OF SECT ION 195 OF THE ACT ARE NOT APPLICABLE AND THERE IS NO QUESTION OF RECOVERY OF TAX IN ACCORDANCE WITH PROVISIONS OF SECTION 201 OF THE ACT. 5.2 THIS VIEW IS VERIFIED BY THE DECISION OF PUNE B BENCH IN ITA NO. 2040/PN/2012 FOR A.Y. 2010-11 IN DEEPAK FERTILI ZERS AND PETROCHEMICALS CORPORATION LIMITED VS. DDIT (INTERN ATIONAL TAX)- I, PUNE, WHEREIN TRIBUNAL HELD AS UNDER: 5. BEFORE US LEARNED AUTHORIZED REPRESENTATIVE OF ASSESSEE SUBMITTED THAT CIT(A) ERRED IN HOLDING THA T AN AMOUNT OF 2,10,000 REMITTED TO GPN, FRANCE TOWARD S PART OF TOTAL LUMP SUM PRICE OF 3,00,000 ON NET OF TAX BASIS FOR ACQUISITION OF PROCESS DESIGN DOCUMENTATION CALLED BASIC ENGINEERING PACKAGE ON OUTRIGHT PURCHASE BASIS FOR AMMONIUM NITRATE PRILL PRODUCTION PURSUANT TO AGREE MENT ENTERED INTO WITH GPN, FRANCE, FEE FOR TECHNICAL SE RVICES THEREFORE LIABLE TO WITHHOLDING TAX IN INDIA. IT WA S PRAYED THAT ASSESSEE BE DECLARED TO BE NOT LIABLE TO MAKE SUCH DEDUCTION OF TAX ON SUCH AMOUNT OF REMITTANCE AND T AX PAID BY IT DIRECTED TO BE REFUNDED TO IT. IN THIS REGARD , ASSESSEE DREW ATTENTION TO VARIOUS ARTICLES OF AGREEMENT DIS CUSSED I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 7 ABOVE. LEARNED AUTHORIZED REPRESENTATIVE OF ASSESSE E ALSO DREW OUR ATTENTION TO THE ORDER OF ITAT, PUNE 'A' B ENCH IN CASE OF ITO VS. M/S. ROYLE EXTRUSION SYSTEMS LTD. IN ITA NO.591/PN/94 AND OTHERS, WHEREIN VIDE PARA 3, THE TRIBUNAL IN ITS FACTS AND CIRCUMSTANCES DISMISSED T HE REVENUE'S APPEAL BY OBSERVING AS UNDER: '10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. THE SUM AND SUBSTANCE OF THE DISPUTE REVOLVES AROUND THE LIABILITY OF THE ASSESSEE TO DE DUCT TAX AT SOURCE ON REMITTANCE OF US$ 120,000TO FOREIG N COLLABORATOR. AS PER THE ASSESSEE, THE STATED REMIT TANCE WAS IN TERMS OF A FOREIGN COLLABORATION AGREEMENT W ITH FOREIGN COLLABORATOR AND THE SAID CONSIDERATION REL ATED TO THE SUPPLY OF DRAWINGS, DESIGNS, AND DETAILED ENGINEERING SERVICES FOR ERECTION OF PLANT FOR MANUFACTURE OF LICENSED PRODUCTS. THE INCOME-TAX OFFICER, TDS-2 PUNE, HOWEVER, CONSIDERED THE SAME A S IN THE NATURE OF ROYALTY/TECHNICAL FEES AND ALSO OBSERVED THAT ASSESSEE'S PLEA THAT 'PAYMENT RELATES TO THE ACQUISITION OF TECHNICAL KNOW HOW FOR THE PURCH ASE OF MACHINERY IS NOT CORRECT ----- . ON THE CONTRARY, THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ACCEPTED THE PLEA OF THE ASSESSEE. WE HAVE ALSO PERUSED THE TECHNICAL-CUM-FINANCIAL COLLABORATION AGREEMENT DAT ED 23.12.1991 AND THE SUPPLEMENTARY AGREEMENTS DATED 8.4.1992 AND 9.4.1992 AND FIND THAT THE STATED REMITTANCE IS PART OF A CONSIDERATION FOR SUPPLY OF TECHNICAL KNOW HOW FOR ERECTION OF PLANT FOR MANUFACTURE OF LICENSED PRODUCTS BY WAY OF SUPPLY O F DRAWINGS, DESIGNS, AND DETAILED ENGINEERING SERVICE S, AS BEING CONTENDED BY THE ASSESSEE. FACTUALLY SPEAKING, WE FIND NO SUPPORT OR MATERIAL TO AFFIRM THE STAND OF THE ASSESSING OFFICER THAT THE PAYMENT DOE S NOT RELATE TO THE ACQUISITION OF TECHNICAL KNOW-HOW FOR ERECTION OF PLANT/MACHINERY. 11. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS POINTED OUT THAT THE BREAK UP OF THE TOTAL CONSIDERATION OF US$ 360,000 STATED IN TH E INITIAL AGREEMENT DATED 23.12.1991 HAS BEEN SEGREGATED IN THE SUPPLEMENTARY AGREEMENT MERELY TO I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 8 TAKE THE BENEFIT OF A JUDGMENT OF THE HON'BLE SUPRE ME COURT IN THE CASE OF SCIENTIFIC ENGINEERING HOUSE P . LTD. (SUPRA). THE ASSESSEE HAD PLEADED THAT THE IMPUGNED PORTION OF THE CONSIDERATION IS FOR THE SU PPLY OF DRAWINGS, DEIGNS AND DETAILED ENGINEERING SERVIC ES FOR THE ERECTION OF THE 'PLANT' FOR THE MANUFACTURE OF THE LICENSED PRODUCTS AND, THEREFORE, THE SAME CONSTITUTES A 'PLANT' AND IN TERMS THEREOF NO INCOM E ACCRUES IN INDIA TO THE FOREIGN COLLABORATOR. THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT IN ORDER TO AVAIL SUCH BENEFIT, THE CONSIDERATION H AS BEEN BIFURCATED IN THE SUPPLEMENTARY AGREEMENT. WE FIND THAT ALL THE THREE AGREEMENTS, NAMELY, THE INI TIAL AGREEMENT DATED 23.12.1991 AND THE SUPPLEMENTARY AGREEMENTS DATED 8.4.1992 AND 9.4.1992 WERE SUBJECT MATTER OF EXAMINATION BY THE INCOME-TAX OFFICER AS WELL AS THE COMMISSIONER OF INCOME-TAX (APPEALS], N O SUCH ALLEGATION, AS IS BEING MADE OUT BY THE LEARNE D DEPARTMENTAL REPRESENTATIVE, IS FOUND IN ANY OF THE ORDERS OF THE AUTHORITIES BELOW. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT REFERRED TO ANY INCRIMINATING MATERIAL OR EVIDENCE TO DEMONSTRATE T HAT THE BIFURCATION MADE OUT IN THE SUPPLEMENTARY AGREEMENTS WAS WITH ANY MALA FIDE INTENTIONS. IN VI EW OF THE AFORESAID AND CONSIDERING THAT THE PLEA OF T HE LEARNED DEPARTMENTAL REPRESENTATIVE IS BASED ON MER E BALD ASSERTION, WE DO NOT FIND ANY MERIT IN HIS PLE A AND THUS FIND NO REASONS TO REMIT THE MATTER BACK TO TH E COMMISSIONER OF INCOME-TAX (APPEALS) FOR ADJUDICATI ON AFRESH.' 6. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE WITH REGARD TO DECISION OF M/S . ROYLE EXTRUSION SYSTEMS LTD, (SUPRA). FACTS BEING SIMILAR , SO FOLLOWING SAME REASONING WE HOLD THAT CIT(A) WAS NO T JUSTIFIED IN HOLDING THAT AN AMOUNT OF 2,10,000 R EMITTED TO GPN ENGINEERING AND PROCESS, FRANCE AS PART OF T OTAL LUMP SUM PRICE OF 3,00,000 ON NET OF TAX BASIS FO R ACQUISITION OF PROCESS, DESIGN, DOCUMENTATION CALLE D BASIC ENGINEERING PACKAGE ON OUTRIGHT PURCHASE BASIS FOR AMMONIUM NITRATE PRILL PRODUCTION PURSUANT TO AGREE MENT ENTERED INTO WITH GPN FRANCE WAS FEE FOR TECHNICAL SERVICE, I.T.A. NO. 489/AHD/13 A.Y. 07-08 [I.T.O.(INTERNATIO NAL TAXATION VS. M/S. HEUBACH COLOUR PVT. LTD.] PAGE 9 THEREFORE, LIABLE TO WITHHOLD TAX IN INDIA. IN VIEW OF ABOVE, WE HOLD THAT ASSESSEE IS NOT LIABLE TO MAKE SUCH PA YMENT ON SUCH DEDUCTION OF TAX ON SAID AMOUNT OF REMITTANCE. ASSESSING OFFICER IS DIRECTED ACCORDINGLY. AS A RES ULT, APPEAL FILED BY ASSESSEE IS ALLOWED AS INDICATED ABOVE. 6. EVEN BEFORE US NOTHING CONTRARY WAS BROUGHT TO O UR KNOWLEDGE ON THESE LEGAL PROPOSITIONS. IN VIEW OF ABOVE DISCUSSION, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS HELD THAT PURCHASE OF TECHNICAL KNOW HOW CANNOT BE TAXED AS ROYALTY AND PROVISIONS OF SECTIO N 195 ARE NOT APPLICABLE. SAME IS UPHELD. 7. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF JANUARY, 2015. SD/- SD/- (N. S. SAINI) (SHAILENDR A KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R TRUE COPY S.K.SINHA ' ' ' ' !( !( !( !( )(&! )(&! )(&! )(&! / COPY OF ORDER FORWARDED TO:- 1. ,- / REVENUE 2. / ASSESSEE 3. 00! 1 / CONCERNED CIT 4. 1- / CIT (A) 5. (56 !, , / DR, ITAT, AHMEDABAD 6. 69: ;< / GUARD FILE. BY ORDER / ' , =/ 0, , ?