Is gain on technical know-how chargeable to tax as capital gain?

Last updated: 27 November 2021

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This High Court judgement addresses whether income derived from technical know-how is subject to capital gains tax. The case, an appeal against a previous order, examines the nature of the gains and their classification for tax purposes. The court's decision clarifies the taxability of such technical knowledge transfers.

Court :
High Court of Karnataka

Brief :
Is technical know how capital in nature under section 45?

Citation :
ITA /568/2015

IN THE HIGH COURT OF KARNATAKA AT BENG ALURU DATED THIS THE 4TH DAY OF OCTOBER, 2021 PRESENT THE HON'BLE MRS.JUSTICE S.SUJATHA AND THE HON'BLE MR. JUSTICE RAVI V. HOSMANI I.T.A.No.568/2015
BETWEEN : 1 . THE COMMISSIONER OF INCOME TAX, LTU, JSS TOWERS BSK III STAGE, EANGALORE-560 085
2 . THE ADDL. COMMISSIONER OF INCOME TAN, LTU, JSS TOWERS, BSK III STAGE BANGALORE-5% 085
(BY SRI K.V.ARAVIND, ADV.)
AND: M/ s ABB LTD., KHANIJA 13HAVAN RACE COURSE ROAD 2ND FLOOR, CAST WING BANGALORE-560 001 PAN:AAACA 3834B
APPELLANTS
RESPONDENT
(BY SRI T.SURYANARAYANA, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14.05.2015 PASSED IN ITA NO.1281/BANG/2010, FOR THE ASSESSMENT YEAR 1997-1998 PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED

Please find attached the enclosed file for the full judgement.

FAQ :

The main issue is whether gains arising from technical know-how are chargeable to tax as capital gains.

The High Court of Karnataka heard this appeal.

The assessment year in question is 1997-1998.

The parties involved are the Commissioner of Income Tax and Addl. Commissioner of Income Tax (Appellants) versus M/s ABB Ltd. (Respondent).

The appeal was filed under Section 260-A of the Income Tax Act, 1961, to formulate substantial questions of law and set aside the previous order.

Attached File : 1442821_4650_ita568_15_04_10_2021.pdf

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Judgement posted by

Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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