TMI Blog2005 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... e work which the appellant-company had done for a foreign client in India. - The professional services could not, therefore, be said to have been rendered from or outside India so as to qualify for a deduction under section 80-O - no error in the orders passed by the Tribunal - - - - - Dated:- 18-11-2005 - Judge(s) : T. S. THAKUR., BADAR DURREZ AHMED. JUDGMENT The judgment of the court was delivered by T.S. Thakur J.- This appeal under section 260A of the Income-tax Act, 1961 arises from an order passed by the Income-tax Appellate Tribunal whereby it has upheld the order passed by the Commissioner of Income-tax (Appeals) and affirmed the finding that a sum of Rs. 92,91,442 out of a total foreign receipt of Rs. 2,13,35,647 did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and, therefore, did not qualify for deduction. A further appeal taken by the assessee to the Income-tax Appellate Tribunal also proved unsuccessful. The Tribunal concurred with the view taken by the Commissioner, that the amount of Rs. 92,91,442 received in foreign exchange represented fees for services rendered by the appellant "in" India and not "from" India as claimed by them. The said amount, therefore, did not qualify for deduction under section 80-O. The present appeal, as noticed earlier, calls in question the correctness of the said view. We have heard learned counsel for the parties and perused the record. Section 80-O of the Income-tax Act, 1961 as it stood at the relevant time and to the extent the same is material for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that such income is received in India within a period of six months from the end of the previous year, or within such further period as the competent authority may allow in this behalf: Provided further that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. Explanation.- For the purposes of this section,- (i) 'convertible foreign exchange' means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the law for the time being in force for regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings in courts within this country yet since the services related to clients who are stationed outside the country and since the payment for such services had been received from outside the country, such services even when relevant directly to litigation pending in Indian courts must be deemed to be services rendered outside India or services rendered from India. It was contended by Mr. Vohra that services could be rendered only to a client and if the beneficiary of any such services was located outside the country, the said services must necessarily be deemed to have been rendered outside the country, no matter that the provider of such service was doing so from India and in relation to proceedings pending in Indian courts. There is, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may not be so in cases where a professional, as in the case of the appellant before us, offers its professional services in courts within the country and receives payment for rendition of such services. In such a situation, what the client gets this services of the professional rendered in India in relation to a matter which is pending in the courts here. The fact that the client who eventually benefits from such service in India is stationed outside the country is not the sole criterion. Payments received by any such professional for such services would not, therefore, qualify for deduction under section 80-O. Mr. Vohra placed strong reliance upon the decisions of this court in CIT v. Mittal Corporation [2005] 272 ITR 87 and CIT v. Inchc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if the foreign recipient of the services utilises the benefit of such services in India." We may at this stage refer to a Division Bench decision of the High Court of Bombay in Searle (India) Ltd. v. CBDT [1984] 145 ITR 673. That was a case where an agreement was executed between the assessee-company and a foreign enterprise which imported pysllium husk from India. The assessee, under the agreement was required to carry out certain test in its laboratory in India and forward to the foreign buyer the results of those tests with a certificate that each lot of pysllium husk conformed to the specifications of the foreign company. The agreement envisaged a payment of US $50 for each lot of pysllium husk in respect of which the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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