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2016 (11) TMI 1010 - HC - Income TaxClaim for deduction under section 80-O - Whether the services rendered by the assessees are from India or in India ? - Held that:- Tribunal has erred on two counts in holding that the assessees are entitled to the benefit of deduction under section 80-O of the Act : First, mere transmission of the information to a foreign enterprise, evidently, abroad does not go to show that it is a service rendered from India, but not in India. With an element of certainty, we can as well say that once there is a contract, an Indian agent always interacts with and sends information-even technical know-how-to a foreign enterprise abroad. If that alone qualifies for deduction without reference to "the services rendered in India", the very expression in explanation (iii) becomes otiose. Trite it is to observe that statutory surplusage is not a settled canon of construction ; rather it is to be avoided. The purpose of the provision is to provide an incentive to the indigenous know-how of whatever nature that reaches the shores of foreign nations and gets applied there. The resultant fruits may percolate to India, too, as is the case in E.P.W. Da Costa [1979 (2) TMI 40 - DELHI High Court ] and Continental Construction [1992 (1) TMI 5 - SUPREME Court ], even in which the apex court has held that not all receipts can claim the concession. If we refer back to the analogy employed by the learned senior counsel for the assessees, an advocate in India may render services to a foreign client stationed abroad concerning a case pending in India. It is a service rendered not only from India, but also in India. On the other hand, if that piece of professional advice is used abroad, even involving clients of Indian origin or laws of this nation as it happens in international arbitrations, the remuneration is qualified for the benefit. Once we look at the range of services referred to in section 80-O, we can discern the thread of connectivity in all the intellectual endeavours mentioned therein : any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to such Government or enterprise by the assessee. It can also be in consideration of technical or professional services rendered or agreed to be rendered outside India to such Government or enterprise by the assessee. They cannot be said to be entirely discrete and disparate. The services have an air of intellectuality ; as such, all and sundry services rendered to a foreign enterprise cannot be taken into account, lest it should amount to doing violence to the Explanation (iii). As seen, rendering includes both providing and performing. In the context of section 80-O, the services may be rendered from India, but have to be performed on foreign soil. Any other interpretation renders the Explanation (iii), in our view, otiose. In the alternative, if one were to assume-it is unlikely, though-that the assessees had rendered certain services which qualify for a deduction, they have, however, failed to place any material in that regard. The agreement unfailingly points out that the assessees are marine-product procuring agents for the foreign enterprises without any claim for expertise capable of being used abroad rather than in India. - Decided in favour of revenue
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