Arijit Pasayat, C.J.

1. All these petitions involve an identical issue and are, Therefore, disposed of by this common order.

2. I. T. R. Nos. 187 to 191 of 1980 relate to the assessment years 1971-72 to 1975-76, I. T. R. No. 266 of 1981 relates to the assessment years 1976-77 and I. T. R. No. 110 of 1981 relates to the assessment year 1977-78. The question referred, under Section 256(1) of the Income Tax Act, 1961 (in short, " the"), by the Income Tax Appellate Tribunal, Delhi Bench (in short, "the Tribunal"), for the opinion of this court, in each of the reference petitions is as follows :

"Whether, on the facts and in the circumstances of the case, the amount of Rs. 10,00,000 paid to the foreign collaborator Reinz in the form of equity shares be treated as revenue expenditure spread over a period of ten years or as capital expenditure over which the permissible depreciation allowance may be allowed "

3. The factual background needs to be noted in brief and is essentially as follows :

The assessed is a private limited company which, at the relevant point of time, was engaged in the manufacture of compressed asbestos fibre sheets. A collaboration agreement was entered into by it with a foreign concern for providing technical know-how in its manufacturing activities. As per the terms of the agreement entered into with the said foreign concern, a sum of Rs. 1 lakh was payable in the form of equity shares which were allotted to the concern. Royalty at the rate of 3 per cent, was also payable on ex-factory selling price of the products manufactured in collaboration, for a period of ten years subject to certain conditions. The agreement was primarily for the supply of appropriate technical literature, data drawings, manufacturing processes and other formula, information, advices and know-how for the manufacture of compressed asbestos fibre material by the foreign company. A provision was also made for training a reasonable number of staff of the assessed-company in the factories of the foreign collaborators. The assessed claimed that payment of Rs. 1 lakh in the form of 10,000 equity shares of Rs. 10 lakhs written off in ten Installments over a period of ten years be treated as revenue expenditure. The Income Tax Officer (in short, " theO") rejected the claim and on appeal by the assessed, the Appellate Assistant Commissioner (in short, "the AAC") confirmed the action of the Income Tax Officer. The matter was carried in further appeal before the Tribunal. When the case was heard by two Members of the Tribunal, there was a difference of opinion between them. While the Accountant Member considered the amount written off each year to be allowable as revenue expenditure in the respective year, the Judicial Member was of the view that the amount in question should be treated as "plant" to be entitled to depreciation. The matter was referred to the Third Member under Section 255(4) of the. The Third Member agreed with the view taken by the Accountant Member by holding that the expenditure claimed by the assessed was of revenue nature only.

4. On being moved for reference, the Tribunal, as set out above, referred the question for the assessment years 1971-72 to 1975-76. For the other years, the Tribunal relied on the judgment relating to the assessment years 1971-72 to 1975-76 and granted relief to the assessed.

5. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of notice. According to learned counsel for the Revenue, the issue is whether the expenditure, as claimed, was of capital nature or revenue in character. According to him, the Judicial Officers view was the correct one and should have been adopted.

6. A similar question came up before the apex court in Eimco K. C. P. Ltd. v. CIT : [2000]242ITR659(SC) . It was held that where a foreign company gives a technical know-how and obtains equity shares in the new company, the amount attributable to technical know-how was not revenue expenditure under Section 37 of the. However, it was treated to be of capital nature. It is clearly borne out from the various orders that the assessed was a new company. That being the position, the Tribunal was not justified in holding that the expenditure in question was revenue in character. In other words, if it being of capital nature, depreciation as available in law has to be granted. The question is accordingly answered.

7. These Income Tax references are disposed of.