Question for consideration was “Whether on the facts and the circumstances of the case and in law, the Tribunal was right in law to hold that the assessee had acquired the ownership rights in the technical knowhow included in the agreement in contradistinction to lease of rights in such knowhow and accordingly the assessee was entitled to deduction under Section 35AB as against under Section 37(1) of the Act ?

Court held that ; on the application of law to the facts in the present facts, the expenditure on account of technical knowhow incurred under the Agreement dated 19th June, 1984 is classifiable under S. 35AB of the Act and not under S. 37 (1)  of the Act. Therefore, question  is answered in the affirmative in favour of the respondent Revenue and against the applicant assessee.  (Dy.CIT v.Anil Starch Products Ltd  ( 2015) 232 Taxman 129 (Guj)(HC) and Diffusion Engineers Ltd v. Dy.CIT  (2015)  376 ITR 487 (Karn)(HC) (based on CIT v.  Swaraj Engines Ltd (2008) 301 ITR 284 (P& H)(HC) dissented from)  ( ITR No. 13 of 2001, dt. 27.04.2018) ( AY. 1986-87)