Judgment :- R. JAYASIMHA BABU, J. Tax Case No. 1971 of 1984 The question referred to us for our decision at the instance of the Revenue and arising out of the respondent's assessment for the assessment year 1974-75 is, as to whether the Tribunal was right in holding that the sum of Rs. 13, 75, 906 being the foreign collaboration fee paid to the foreign collaborator should be allowed as a revenue expenditure in computing the income of the assessee for the assessment year 1974-75. The assessee is a manufacturer of cranes. It had, in response to a tender, floated by the Cochin shipyard offered to design, manufacture, supply and erect crane of 150 tonnes capacity. The petitioner had not manufactured a crane of that capacity earlier and the purchaser, Cochin shipyard, having insisted upon the petitioner involving a reputed foreign crane manufacturer at all stages from the stage of design to the time of erection. The petitioner entered into an agreement with a German company for obtaining design and drawings, as also for the supervision in India of the manufacture and of the erection of the crane at the Cochin shipyard. The agreement so entered into sets out the fact that this is a one time arrangement for the manufacture, supply and erection of the 150 tonne crane for the Cochin shipyard. Clause (B) of the recitals in the agreement specifically sets out that the arrangement is intended as limited to "this particular crane only". In the statement of case drawn up by the Tribunal, the Tribunal has set out the relevant portions of the correspondence between the assessee and the Cochin shipyard, which shows that the assessee had, even at the stage of tendering, informed the purchaser that if the purchaser was to insist upon the involvement of the foreign collaborator, the additional expenditure in foreign exchange will have to be borne by the purchaser. The purchaser - Cochin shipyard had not only insisted upon the involvement of a reputed foreign manufacturer of cranes in the execution of this order, but, had further required the assessee, even prior to starting of manufacture to secure the designs and drawings for the crane from the foreign collaborator, as also the services of the collaborator for the manufacture, erection, testing and commissioning of the crane. The shipyard had written to the assessee, inter alia, as under: "We very much welcome your collaborating with the PHB in the supply of 150 tonnes gantry crane to us. We feel that since you will be getting the design calculations of the crane, checking up with them and also taking their assistance in the manufacture and erection of the crane, it will be proper to entrust them the work of supervision during manufacture and also erection, directly by you so that the entire responsibility is taken by Chitram." In the agreement between the assessee and its collaborator, their respective positions were described as general contractor and sub-supplier. The relevant part of the recitals in the agreement reads as under: "Chitram and PHB/JUCHO will process this contract. Chitram acting as general contractor and PHB/JUCHO as sub-supplier for the engineering and for the assignment of supervising staff for the fabrication in India as well. Supervising of the fabrication in India does not relieve Chitram from its responsibility for the proper operation of the items supplied by them." It is clear from a perusal of the terms of the agreement, a copy of which has been placed before us, as also from a perusal of the correspondence exchanged between the purchaser and the assessee, relevant parts of which has been set out in the statement of the case, that the arrangement as between the assessee and the foreign collaborator was really one of the principal supplier and the sub-supplier in respect of one specific crane to be supplied to the Cochin Shipyard. The services provided by the foreign supplier was not part of a general arrangement meant to enable the assessee to take up the manufacture and commission of cranes of this capacity. The contribution of the collaborator was towards the manufacture and supply of one 150 tonnes capacity crane for which, order had been placed by the Cochin Shipyard on Chitram subject to Chitram obtaining foreign collaboration in the execution of that orderWe are, therefore, of the view that the Tribunal has rightly held that the payments made by the assessee to the foreign collaborator were in the nature of revenue expenditure and did not amount to capital expenditure. Learned counsel for the Revenue, however, submitted that the assessee had received enduring benefit of lasting nature, as the assessee was free to use the drawings and designs, not only for the manufacture of this crane, but, for the manufacture of 150 tonnes capacity crane at any point of time in the future. That certainly was not the intention of the parties, as disclosed in the agreement. The arrangement was specifically for the purpose of executing a single order and the supply from the foreign collaborator was secured at the instance of and for the benefit of the purchaser, who had insisted upon the same. An expenditure, which is of revenue nature cannot be treated as otherwise, by speculating on the possible user of the technical data or the design in future by the assessee. There was no evidence whatever before the Income-tax Officer or before the Tribunal to show that the assessee had commenced manufacture of 150 tonnes capacity cranes on a commercial basis, and had produced such cranes, and/or marketed them after the execution of this order, by utilising the designs and drawings provided by the collaborator. The benefit, which the assessee had secured in this case, was the benefit which was meant for and utilised in the manufacture of the crane supplied to the Cochin Shipyard and no more. The Tribunal's view that the expenditure was of a revenue character is the correct view which was required to be taken on the facts of the case. We, therefore, answer the question referred to us in the affirmative, in favour of the assessee and against the Revenue. The assessee shall be entitled to costs in the sum of Rs. 1, 000.