TMI Blog2011 (7) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... nkar Nambiar, Anil D. Nair, Smt. Priya Mahesh, Smt. Priya Manjooran and Dr. K.P. Pradeep for the Respondent. JUDGMENT Ramachandran Nair, J. These appeals are filed by the Revenue for sustaining assessment of the tax paid by the respondent assessee on remittance made to a foreign collaborator as income assessable at the hands of the respondent. 2. We have heard learned Senior counsel Shri. P.K.R. Menon appearing for the appellant and learned counsel appearing for the respondent. 3. The respondent assessee, a Company engaged in manufacture of ceramic products at Special Economic Zone, Kochi, entered into an agreement with a British Company for technical collaboration for manufacture of products. Clause 11 of the technical co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's claim for exemption under Section 10(6A) and held that the income earned by the Foreign Company cannot be grossed up under Section 195A for the purpose of assessment. The Tribunal-confirmed the same, against which the Department has filed these Appeals. 5. Before us learned Senior Standing Counsel for the Revenue contended that Section 195A applies irrespective of Section 10(6A). His further contention is that remittance of tax by the respondent assessee is not separately approved by Government of India in terms of Section 10(6A) of the Act. Since the controversy is with regard to the scope and application of Sections 10(6A) and 195A of the Act, we extract hereunder the said provisions. "10 Incomes not included in total income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount payable under such agreement or arrangement." 6. As already stated, the assessee is liable to be assessed for payment of tax on the income earned by the foreign company in India in connection with the technical collaboration agreement such Company has with the assessee, and the same is not in dispute. The only dispute raised by the assessee is against the demand of tax on the income grossed up with the tax component by applying Section 195A of the Act. In other words, the assessee's contention is that the assessee is liable to be assessed on the remittance made to the foreign company, which is their income and not the tax paid thereon by the assessee by virtue of clause 11 of the agreement. We are of the view that the first appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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