UNIVERSAL PLAST LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this application under s. 261 of the IT Act, 1961 ('the Act') the assessee has sought for a certificate of fitness for appeal to the Supreme Court contending that the following substantial questions of law of general importance arise from the judgment and order passed by us in IT Ref. No.17 of 1991 on 6th Feb.,1992:

(2.) THE licence was termined by the assessee as the licensor in two contingencies, viz., (1) breach of any of the terms of the licence agreement or making default in payment of any two quarterly installment of licence fee, and (2) in the event of winding up of the licensee.

(3.) THE case in our view present no difficulty or controversy to be resolved by the Supreme Court, the decision being based on the principles laid down by the Supreme Court for determining the issues arising from such letting, leasing or licensing of the business assets. What is decisive in such matter is the intention-whether the commercial asset was intended to be exploited by the assessee by such letting out for a temporary period. it is pre-dominantly a matter of intention to be gathered from attendant circumstances. This principle is also by now well settled in CIT vs. Vikram Cotton Mills Ltd. (1988) 67 CTR (SC) 259 : (1988) 169 ITR 597 (SC). The now fact that the assessee had conferred on the licensee in the case the unqualified power of purchasing the entire undertaking after 10 years at a pre-determined price gives transparency to the assessee's intention of not resuming the business at the time it entered into the agreement. There cannot arise any substantial question of law of general important to be settled by the Supreme Court as the law in this regard already stands settled and the matter raises no question which can be said to be as open question requiring an answer by the Supreme Court.