- (1.) Heard Sri Manish Mishra, Advocate, for appellant and perused the record.
(2.) This appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as "Act, 1961") arising from judgment and order dated 28.02.2005 passed by Income Tax Appellate Tribunal, Lucknow Bench, Lucknow (hereinafter referred to as "Tribunal") in Income Tax Appeal No. 596/Alld/95 and Income Tax Appeal No. 450/Alld/95 Tribunal was admitted on following two substantial questions of law: "I. Whether on the facts and in the circumstances of the case, Tribunal was justified in holding an amount of Rs. 18,20,277.00 being royalty paid to its collaborators, M/s CEAT, CAVI and SAPI, Italy for technical collaboration as revenue expenditure. II. Whether on the facts and in the circumstances of the case Tribunal has failed to appreciate that Assessing Officer had rightly distinguished the decision of the Bombay High Court in CIT v. Tata Engineering and Locomotives Co. Pvt. Ltd. (1980) 123 ITR 538 relied upon by the assessee and has rightly treated the amount of royalty as capital expenditure relying upon the order passed by the Apex Court in M/s Scientific Engineering House reported in 157 ITR 86."
(3.) In the present case, from the facts, as emerged from record, it is clear that "technical know-how" remained property of Foreign Company and Assessee has only right to use the same on payment of royalty to the said Company.;