CASE LAWS DETAILS
DECIDED BY: HIGH COURT OF KARNATAKA,
IN THE CASE OF: CIT Vs. Molex (India) Ltd., APPEAL NO: ITA No. 1536 of 2005, DECIDED ON July 13, 2010
RELEVANT PARAGRAPH
8. It is significant to note that the assessee had to directly bear the air fare and other traveling and living expenses of each such technician. Further, the assessee had to pay Molex, fees as was mutually agreed and as was permissible, per man for each day. The said payment was in addition to the air fare and other traveling living expenses of the technicians to be borne directly by the licensee. Therefore, it is clear the amount paid for imparting the necessary know-how and expertise to the assessees personnel cannot be construed as a payment for acquiring the know-how as firstly, such a payment was not made in lump sum as required under section 35AB and secondly, that payment is not for acquisition of know-how but to impart the knowledge of that know-how to the assessee’s personnel for the use and exploitation of the technical data and improvements thereto. Therefore, for attracting section 35AB, three conditions must exist. They are:
(1) A lump sum consideration;
(2) It is for acquiring the know-how and
