JUDGMENT : SUSHIL HARKAULI, D.N. PATEL, JJ. 1. These appeals relate to the Assessment Years 1993-94, 1994-95 and 1995-96. Some appeals are by the Assessee, formerly known as 'TATA Yodogawa Ltd.' now known as Tayo Rolls Ltd. (hereinafter referred to as the 'Assessee'). Other appeals are by the Income Tax Department. 2. These appeals have been filed against the orders of the Income Tax Tribunal (hereinafter referred to as 'ITAT' for short). 3. Since common questions of law arise in these appeals, therefore, they are being disposed of by this common order. 4. The basic facts necessary for decision of these appeals are that the Assessee entered into a technical collaboration agreement with M/s Eisenwerk Sulzau-Werfen, Austria (hereinafter referred to as 'ESW'). By that agreement the Assessee was to acquire know-how from ESW against certain consideration, for the purposes of using the know how in the business of the Assessee. 5. Under the collaboration agreement the know-how was to be provided to the Assessee by ESW, in consideration whereof the Assessee was to pay a sum of two million Deutsche Marks (hereinafter referred as DM) overseas i.e. Austria in three equal installments in the manner laid down in paragraph 13.1 of the agreement. In addition to the above, the agreement provided that taxes, if any, on the aforesaid payment were to be born by the Assessee vide paragraph No. 13.5 of the said agreement. 6. After approval of the said technical collaboration agreement by the appropriate authorities, the Assessee applied u/s 195(2) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act' for short) to the Assessing Officer (hereinafter referred to as AO), for grant of permission to remit the said consideration without deduction of tax at source. 7. The AO passed orders directing the Assessee to deduct TDS u/s 195(2) of the Act directing the Assessee to deduct TDS while remitting the payments to ESW. 8. As a result the Assessee paid certain amounts by way of income tax on the remittances and also paid some further amounts by way of 'Research and Development Cess' before making the remittances. 9. The Assessee filed appeals u/s 248 of the Act against the orders passed by the AO u/s 195(2) of the Act. 8. As a result the Assessee paid certain amounts by way of income tax on the remittances and also paid some further amounts by way of 'Research and Development Cess' before making the remittances. 9. The Assessee filed appeals u/s 248 of the Act against the orders passed by the AO u/s 195(2) of the Act. In the appeals the Assessee asserted that no income tax was payable on the remittances to ESW because of the provisions of the Act read with the International Agreement for avoidance of double taxation. 10. The appeals of the Assessee were allowed by the CIT(A) upholding the aforesaid contention of the Assessee and holding that no income tax was payable on the remittances. However, the Income Tax Department went in appeal before the ITAT against the orders of the CIT(A). Because those appeals filed by the Department were pending before the ITAT, therefore the AO refunded the income tax deposited by the Assessee along with the interest accrued on the said tax in terms of Section 244A, after obtaining indemnity bonds guaranteeing redeposit of the refunded tax and interest, in case the orders of the CIT(A) were reversed by the ITAT. 11. The ITAT dismissed the appeals and thereafter also rejected the applications of the department seeking reference u/s 256(1) of the Act (as the said section stood in the relevant years). The orders rejecting the reference applications of the Department u/s 256(1) by the ITAT was served upon the Assessee on 17.5.1999 i.e. to say in the financial year relevant to the assessment year 2.000-01. Thereupon the Assessee credited the refunded amounts in its audited accounts drawn up for the said financial year ending 31.03.2000 corresponding to the assessment year 2000-01 in accordance with Section 41 of the Act. 12. The following questions of law have been raised in these appeals: (1) Whether deduction u/s 35AB was permissible only in respect of the remittances made by the Assessee to ESW or it was permissible in respect of the income tax paid by the Assessee on the said remittances in terms of the collaboration agreement ? To be more specific the question is whether the phrase "lump sum consideration" as used in Section 35AB(1) would include the taxes paid by the Assessee under the agreement for acquisition of know-how. To be more specific the question is whether the phrase "lump sum consideration" as used in Section 35AB(1) would include the taxes paid by the Assessee under the agreement for acquisition of know-how. (2)(a) Whether the reversal of the order of the AO, passed u/s 195(2), by the CIT(A) in appeal u/s 243, would disentitle the Assessee to claim the deductions in respect of the income tax paid by the Assessee on the foreign remittances ? (2)(b) Whether the said reversal by the CIT(A) would not have the effect of disallowing the deductions, but the deductions claimed allowed and refunded would have to be added to the income of the Assessee u/s 41 in the year when the reversal by the CIT(A) attained finality upon communication service of the order rejecting the Department's application u/s 250(1)? (3) Whether the deductions u/s 35AB were liable for prima facie adjustment contemplated u/s 143(1)(a)(ii) of the Act by the AO ? 13. So far as the first question is concerned, we find from Section 35AB that deduction is permissible in respect of any lump sum consideration for acquiring any know-how for use for the purposes of the Assessee's business. 14. 'Consideration' in Section 35AB is to be understood in the sense in which it has been used in the Indian Contract Act. Therefore the word "consideration" would include the entire obligation of the Assessee, without which the assesses would not be able to acquire the know-how. 15. On the facts of this case the obligation of the Assessee under the agreement with ESW extended not merely to remitting the amount of two million DM to ESW, but also extended to payment of taxes which would include the income tax as well as the R&D Cess. It seems quite obvious that if the Assessee had not paid the tax or the R&D Cess, and had merely made payment of the two million DM to ESW, the latter would not be obliged to part with the know-how in view of the terms of the collaboration agreement. Therefore, payment of these taxes are as integral a part of the 'consideration' as the payment of two million DM. In fact the income tax department is itself treating not merely the amount of two million DM paid to ESW but also the R&D Cess, as part of 'consideration'. Therefore, payment of these taxes are as integral a part of the 'consideration' as the payment of two million DM. In fact the income tax department is itself treating not merely the amount of two million DM paid to ESW but also the R&D Cess, as part of 'consideration'. In these circumstances we find no logical reason for not treating the income tax paid by the Assessee in terms of the collaboration agreement as part of the 'consideration' for acquisition of the know-how. We hold accordingly and answer the first question as above. A reference in this connection may be made to the decision of the Supreme Court in the case of McDowell and Co. Ltd. Vs. Commercial Tax Officer, AIR 1986 SC 649 wherein it was held that excise duty was part of the 'consideration'. Another direct decision covering the question is by the Madras High Court in the case of Commissioner of Income Tax Vs. Standard Polygraph Machines Pvt. Ltd., (2000) 243 ITR 788. Before leaving this issue we may say that the words "lump sum" as used before the word "consideration" in Section 35AB, only exclude periodical or turnover based payments like royalty etc., and any one time payment for the know how would fall within the expression "lump sum" if it is fixed and specified in the agreement, although it may be payable in installments. 16. So far as the second question is concerned, we find that Section 41 of the Act takes complete care of situation obtaining in this case. 16. So far as the second question is concerned, we find that Section 41 of the Act takes complete care of situation obtaining in this case. For ready reference, Section 41(1)(a) which is relevant to the present case is quoted below: 41 (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the Assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year,- (a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to Income Tax as the income of that previous year, whether the business or profession in respect o' which the allowance or deduction has been made is in existence in that year or not; or 17. Further, we find that the reversal order by the CIT(A) in appeal u/s 248 against the orders u/s 195(2) had not attained finality till much after the relevant assessment years i.e. 1993-94, 1994-95 and 1995-96. The said reversal by the CIT(A) attained finality only on 17.05.1999 when the order of the ITAT rejecting the reference application of the Department u/s 256(1) was served upon the Assessee. We therefore, answer the second question by holding that the deduction u/s 35AB was liable to be allowed in the relevant assessment years and the refund, consequent upon the reversal of the AO's TDS orders u/s 195 by the CIT(A), became liable to be added u/s 41 only on and after 17.05.1999 when such reversal order attained finality to the knowledge of the Assessee. This is more so because of the refund being conditional upon furnishing of the indemnity bond. In this connection reference may be made to the decision of the Supreme Court in the case of Commissioner of Income Tax, West Bengal-II, Calcutta Vs. Hindustan Housing and Land Development Trust Ltd., (1986) 3 SCC 641 . This is more so because of the refund being conditional upon furnishing of the indemnity bond. In this connection reference may be made to the decision of the Supreme Court in the case of Commissioner of Income Tax, West Bengal-II, Calcutta Vs. Hindustan Housing and Land Development Trust Ltd., (1986) 3 SCC 641 . In that case it was held by the Supreme Court that in case of compulsory acquisition of land, the amount paid by way of compensation upon furnishing of security bond for refund of the compensation in the event of appeal being allowed did not accrue and the land owner did not have the absolute right to the compensation till the appeal had been decided. The Supreme Court held that the right to such income in the nature of compensation would arise or accrue only after final determination of the appeal and therefore. it was not liable to tax till such final determination. Subsequently the Income Tax Act has been amended to take care of such situations in accordance with the law laid down by the Supreme Court. 18. Another case cited at the bar in the same context is the decision of the Allahabad High Court in the case of J.K. Synthetics Ltd. Vs. O.S. Bajpai, Income Tax Officer, Central and Another, (1976) 105 ITR 864 which has been upheld by the Supreme Court in the case of Union of India and another Vs. M/s. J.K. Synthetics Ltd., AIR 1994 SC 1541 . It has been held in that case that the liability u/s 41 would not arise finally till the tribunal has decided the matter. It was also held by the Supreme Court that there would be no prejudice to the department by taking this view. 19. So far as the third question is concerned, it is trite that u/s 143(1)(a)(ii) prima facie adjustment is permissible only in respect of claims, the incorrectness of which is apparent from any information in the return. Debatable claims are not liable to such prima facie adjustments. We, therefore, hold that the AO was not justified in making prima facie adjustments in respect of the deduction claimed in respect of the income tax paid by the Assessee as part of the lump sum consideration for acquiring the know-how. Debatable claims are not liable to such prima facie adjustments. We, therefore, hold that the AO was not justified in making prima facie adjustments in respect of the deduction claimed in respect of the income tax paid by the Assessee as part of the lump sum consideration for acquiring the know-how. For support to the above proposition reference may, be made to the decision of the Supreme Court in the case of Kvaverner John Brown Engg. (India) (P) Ltd. Vs. Asstt. Commissioner of Income Tax, (2008) 305 ITR 103. 20. Apart from the above, another argument were advanced from the side of the Assessee that it was not open to a co-equal Bench of the ITAT to defer and take a different view for a subsequent assessment year in respect of the same Assessee -- However it is not necessary to go into that argument In view of what has been stated above. 21. In view of our answers to the questions which arise, we dismiss the appeals of the Department being Tax Appeals No. 29 and 30 of 2001, Tax Case No. 13 of 2001 and TAX Appeal No. 26 of 2002 and we allow the appeal of the Assessee being Tax Appeal No. 27 of 2001.