AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, the following question of law has been referred to this court:"whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the payment of 36,470 made by the assessee-company to the foreign party as consideration for outright sale of drawings and design was not 'royalty' exigible to tax under the Income-tax Act, 1961 ?"

( 2 ) SHORTLY stated, the facts are as follows : the assessee received a letter of intent from Light Metal Industries Limited (hereinafter referred to as "the LMI") for maintenance and supply of terminal equipment for a secondhand aluminium cold-rolling mill being imported by them for their aluminium-rolled products project at Village Hoera in the District of Hooghly, West Bengal. LMI also issued a purchase order dated March 30, 1984, in terms of which the assessee was to arrange for the import of concept designs and drawings enabling it to prepare the detailed manufacturing drawings for purposes of manufacture of the terminal equipments which were required to be supplied by the assessee as per the letter of intent

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