9911796707
TMI Blog2011 (7) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel 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 collaboration agreement produced as Annexure G is as follows:- "11. Taxes All direct or indirect taxes and the import duties due in India in connection with the performance of the Agreement shall be borne by TCKL. All direct or indirect taxes and import duties in London in connection with the performance of the Agreement shall be borne by APT." In terms of the above provision, for the remitta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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.-In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ** ** ** (6A) Where in the case of a foreign company deriving income by way of royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 appellate authority and the Tribunal rightly upheld assessee's claim because the agreement stands approved by Government of India and there is no dispute on this. The contention of the Senior Standing Counsel for the Revenue that tax remittance itself should be separately approved by Government of India is not tenable because Section 10(6A) speaks about only approval of agreement and when the agreement is approv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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