TMI Blog2004 (11) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... d/or fell outside the parameters laid down in the said circular of the Board, and ( ii )the learned CIT(A) in perceiving the specific and contextual meaning and import of the expression "foreign enterprise", as it appears in the provisions of section 80-O, misdirected himself in giving a meaning thereto as the direction of the CIT(A) was contrary to the meaning and import of the said expression laid down by the Supreme Court in " Petron Engineering Construction Pvt. Ltd. v. CBDT " (175 ITR 523)." 2. The sole question here is as to whether the services referred to by the assessee are entitled to get the benefits as envisaged under section 80-O of the Act, or not. 3. The claim of the assessee is pertaining to services rendered to M/s. Caribjet Inc. which is a foreign enterprise an international wet lease company. The services rendered by the assessee are : ( a )Recruitment ( b )Specialized training ( c )Roastering ( d )Managerial ( e )On flight services, etc. 4. M/s. Caribjet Inc. requires the services of crew personnel who are equipped to render services on international flights and who have specialized knowledge of the following spheres of the aircraft : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and boarding ladder etc. 4.1 Apart from this, the crew has to be technically sound in all pre-flight checks, demonstrate the use of the oxygen mask and life vests, adjust cabin lights as required, ensure that all the portable equipment is available and serviceable in the respective working zones, put the power mode selector according to the captain s command and check the hand baggage and passenger seats for take-off procedures in case of turbulence, use of safety equipment and its locations, etc. The crew is further expected to be aware of the services in respect of various foods and beverages, health hazards, first aid, requirements of serving food at different times, viz., breakfast, lunch, dinner supper and collation. The crew is required to be familiar with various items that can be served for each meal and as to which of the items have to be served warm or cold. 5. The department has not denied such services being rendered by the assessee. The case of the department is that the activities of the assessee during the years were confined to undertake obligations as a consequence of its contract with M/s. Caribjet Inc. This was pursuant to M/s. Caribjet Inc. s agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any error whatsoever with the well reasoned order of the learned CIT(A). The principal to principal relationship of the assessee with M/s. Caribjet Inc. has not been refuted. Therefore, it is wrong to say that it was only the assessee s contractual obligation which was being discharged and that no professional or technical services were being rendered. The assessee has not acted as a mere agent of M/s. Caribjet Inc. in India. A detailed description of the services rendered by the assessee, as discussed hereinabove, was laid bare before the Assessing Officer. Still, the Assessing Officer unreasonably held that the assessee merely acted as an agent of M/s. Caribjet Inc. In fact, it is evident that it was in its own right that the assessee was making the recruitment. Moreover, the highly specialized nature of the services rendered, as referred to by the assessee, have been just brushed aside lightly. For instance, it cannot be denied that the simple operation of demonstration of use of oxygen masks and life jackets, requires training, which a common man does not have, and this is only one of the very basics that a crew member of an international airline needs to know. The upper rang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was making available to the foreign enterprise, the information concerning industrial, commercial or scientific knowledge, experience or skill was, however, turned down since, as per the Hon ble High Court, there was no such provision to be found in the agreement. 7.6 On appeal, the Hon ble Supreme Court, dismissing the appeal of the CBDT, held that running a well equipped, modern hotel is not ordinary affair. One needs a great deal of expertise, skill and technical knowledge for the purpose. Examined as a whole, the agreement in question provided for the rendering not only of technical services for operating the hotel of the foreign enterprise, but also of professional and other services in connection with operating of the hotel. Section 80-O was enacted with the twin objects of encouraging the export of Indian technical know-how and augmentation of foreign exchange resources of the country. Although, after the amendment of section 80-O by the Finance Act (No. 2) Act of 1991, the words "technical or professional services" had been inserted in the place of the word "technical services", in a matter of the present nature and the legislative intention to give relief, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... school of thought thus emerging from these deliberations is that, broadly speaking, a profession will imply any vocation carried on by an individual, or a group of individuals, requiring predominately intellectual skills, dependent on individual characteristics of the person(s) that vocation, requiring specialized and advanced education or expertise. Irrefutably, the assessee herein is rendering professional services as contemplated in the above definitions of profession . If commercial or scientific knowledge is confined to mean the abstract exposition of commercial or scientific theories only a book on commercial or scientific subjects may be regarded as scientific knowledge, as observed by " EPW Da Casta " ( supra ). But knowledge may be general or particular. Such knowledge as was compiled classified and made useful for its clients by the assessee also comes within the ambit of commercial or scientific knowledge. Without the in-depth knowledge and study of the particular industry from which the client hails, the assessee would not in a position to disseminate the requisite information regarding executive search, for which the assessee consultancy is engaged by its clients. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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