9911796707
TMI Blog2012 (6) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... amended collaboration agreement was an extension of the old agreement which was entered into before 1.4.76 and hence the tax was payable at the rate of 50%? 2. Whether on the fact and in the circumstances of the case the Tribunal was right in not giving specific direction to the Assessing Officer, to grant consequential benefits if the agreement dated 21.8.81 is treated as an agreement entered into before 1.4.76? 2. The assessee herein is a non resident assessee represented through its agency BHEL. The said non resident company had an agreement with the Indian company for passing on technical knowhow to manufacture industrial boilers and fans. The first agreement between the company for transfer of technical knowhow was entered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the agreement dated 21.8.81 for a further period of seven years from 16.11.80, as part of the first agreement dated 26.11.1973, the Commissioner of Income Tax (Appeals) invoked proceedings under Section 263 of the Income Tax Act and held that royalty payments were chargeable at the rate of 50% of the total income determined. Thus, in exercise of power under Section 263 of the Income Tax Act, revisionary proceedings were initiated, treating the assessment as prejudicial to the interest of the Revenue. After giving notice, the proceedings were finalised. 4. The assessee objected to the proceedings contending that the agreement dated 21.8.81 was a new agreement and it was not an agreement extending the period of the agreement. The ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.8.81 merely extended the period which was originally given under agreement dated 26.11.73. In the circumstances, the Tribunal held that the view of the Commissioner of Income Tax in directing the Assessing Officer to deduct tax at 50% of the total income of the assessee was correct. 7. As regards alternative ground taken by the assessee, the Tribunal confirmed the view of the Commissioner of Income Tax that it would not fall under the purview of Section 263 of the Income Tax Act. Aggrieved by this, the assessee is on appeal before this Court. 8. Learned counsel for the assessee pointed out that when the assessee had taken a specific stand by way of alternative ground for deduction of expenditure and exemption in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s learned standing counsel for the Revenue. 11. As regards the first question of law raised on the character of the second agreement as to whether the same was extension of the original agreement or not, learned counsel appearing for the assessee submits that the assessee is not making serious dispute on the view taken by the Tribunal as well as by the Commissioner of Income Tax. Learned counsel for the assessee pointed out that on the above admitted fact that 1981 agreement has to be treated as amendment to the agreement of the year 1973, and hence, part of it, the consequential relief should have been considered. 12. In the light of the admitted fact position, we agree with the contention of the assessee that once 1981 agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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