TMI Blog2010 (6) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... y whether the fee for design and engineering documentation received by the assessee company is taxable in India. 3. The facts relating to the issue are stated in brief. The assessee is a non-resident company and it is represented by M/s Rashtriya Ispat Nigam Ltd., (RINL) Visakhapatnam. The assessee company has provided design and engineering services, manufacture, delivery, technical assistance through supervision of erection and commissioning etc., to establish compressor house-I for M/s. RINL. The payments were made by M/s RINL separately for each of the services/equipments provided/supplied by the assessee. It, inter alia, included payment made towards supply of design and engineering drawings. The assessee company claimed the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignated by the Purchaser in Japan as the case may be. Though the Ld DR contended that there is no proof to show that the supply has taken place in Japan, yet we notice from the record that there was no dispute on this point. According to the clauses cited above, the preparation and delivery of design and drawings have to take place in Japan. Since the contract was entered into between the parties prior to the commencement of construction of the Compressor House-I , in the absence of any other contrary evidence, it has to be accepted that the preparation and delivery of the said documents have taken place in Japan. 4.1 The Hon ble Supreme Court, in the case of Ishikawajima Harima Heavy Industries Ltd., Vs. Dir. of IT (288 ITR 408 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Tribunal held that design and drawing charges are in the nature of fee for technical services. However, it may be pertinent to note that the Tribunal in that case, accepted the alternative contention of the assessee that the said fee cannot be assessed in India, unless it is shown that some part of work has emanated from Indian territories. 4.4 Hence on a conspectus of the matter, we are of the view that the amount received by the assessee for supply of design and engineering drawings is in the nature of plant and since the preparation and delivery has taken place outside Indian territories, the same can not be subjected to tax in India. Accordingly we set aside the order of the Ld CIT (A) and direct the AO to delete the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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