9911796707
TMI Blog1997 (10) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... JT Mobiles Limited (JTM) in which Telia had a 26 per cent. shareholding. JTM bid for some of the regional cellular circles offered by the Indian Government and was successful in obtaining two Group Special Mobile (GSM) cellular licences, one for the State of Karnataka and one for the State of Andhra Pradesh. Highly sophisticated cellular telecommunications such as those constructed by JTM are new in India. As such, persons experienced in planning, designing, setting up and operating such net works had to be recruited for the proper establishment of cellular network and efficient customer care systems. Telia, therefore, deputed the applicant (and some others of its employees) to oversee the setting up and the successful implementation of the digital cellular telecommunication network of JTM in India. This has been done in terms of a technical services agreement dated March 27, 1997, between Telia and JTM, a copy of which has been placed on record. The applicant first arrived in India on April 10, 1996. He has not been physically present in India at any time earlier. He is, therefore, non-resident within the meaning of the Income-tax Act, 1961 ("the Act"), during the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Telia) shall provide you with such allowances and reimbursement of taxes paid in India as may be agreed to between the company and yourself". A letter from Telia indicating the responsibilities in the present assignment has also been produced. The applicant's agreement with Telia is dated April 1, 1996. It appoints the applicant as technical project manager in the project with JTM. The remuneration fixed is a base salary of SEK 456,000 per annum with other allowances and perquisites. The agreement specifically provides that all Indian income-tax liability arising as a result of the employment will be borne by the company. The applicant has filed a return of income on June 26, 1997, before the Assistant Commissioner of Income-tax, Salary Circle, Bangalore, in which exemption under section 10(5B) of the Act has been claimed in respect of the salary income referring to the amount of tax paid by the company to the Government on this account as tax deducted at source. The question on which the applicant seeks the ruling of this Authority has been expressed thus in annexure-IV to the application under section 245Q(1) of the Act : The applicant requests that a ruling may be granted un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Gazette, specify, who is employed in India in a capacity in which such specialised knowledge and experience are actually utilised." In exercise of the powers conferred by sub-clause (iii) of the Explanation to section 10(5B), the Central Government has issued a Notification No. S. O. 569(E) (see [1993] 203 ITR (St.) 56 ), dated July 27, 1993, specifying the following fields for the purposes of section 10(5B) : (i) Grading and evaluation of diamonds for diamond export or import trade ; (ii) Cookery ; (iii) Information technology including computer architecture systems, platforms and associated technology, software development process and tools. The claim of the applicant is that he possesses special knowledge and experience in the field of information technology and that as this knowledge and experience is being utilised for the benefit of JTM in the project of Telia-JTM, he is entitled to the exemption under section 10(5B). Before dealing with the question on the merits, it is necessary to refer to the terms of clause (a) of the proviso to section 245R(2) which requires the Authority to reject an application "where the question raised in the application is already pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims to fall under the definition by virtue of the notification dated July 27, 1993 (see [1993] 203 ITR (St.) 56 ). According to the Department, however, the expression "information technology" has a much narrower meaning and that expression should be understood only in relation to computer systems and software systems. Attention is invited to the definition in the New Shorter Oxford Dictionary and the New Encyclopaedia Britannica. The former defines it as "technology that deals with the storage, processing and dissemination of information especially using computers" and the latter as "having references to advances in computer software and their ramifications". It is said, therefore, that the expression deals with storage of data, information, files, records, etc., and their retrieval. It is said that "telecommunication services", such as are being set up under the contract in the present case, are not covered under the definition. Attention is drawn to section 80-IA which specifically uses the words "telecommunication services, whether basic or cellular", to section 80HHE which gives tax deduction in respect of profit derived from "export of computer software or its transmission fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork is explained below. The signals sent from a communicating mobile handset are transmitted to the cellular tower (BTS) through a GSM radio link and thereafter via the microwave backbone circuit to the central switch. The central switching centre routes the call to either the point of interconnection with the Department of Telecommunications network, or through the backbone and BTS to a receiving mobile handset. The above process is achieved purely through software and programmes developed specially for such purpose, used on a complex, structured computer architecture system and the related computer platforms. In addition, highly sophisticated computer programmes and computers are used to maintain caller identity security and effect billings. In view of the complex structure of the incentive schemes being offered, the use of such sophisticated billing systems achieves greater importance. Each of the above components/equipment fulfils a vital function in the operation of the cellular telecommunications network. Further, the functions are interdependent and work in close conjunction with one another to ensure the smooth working of the network. The basic platform on which the networ ..... 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