TMI Blog2002 (11) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... -There are five assessment years involved and the common question of law referred to us reads as under: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the royalty on export sales, receipts for engineering services and receipts for visit of experts were not taxable within the meaning of section 9(1)(vi) of the income-tax Act, 1961?" The assessee is a company in West Germany, as then known. The assessee entered into a collaboration agreement with the Indian company, BHEL, Trichy, dated November 26, 1973, and we are concerned with three kinds of payments received by the assessee, namely, royalty, fees for sending technicians to India and special engineering fees for a particular i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x (Appeals) for the assessment years 1980-81, 1981-82 and 1982-83 before the Income-tax Appellate Tribunal and the Appellate Tribunal in I.T.A. Nos. 4125 to 4127 (Mds) of 1987, upheld the order of the Commissioner of Income-tax (Appeals) on the ground that the amounts were exempt under the Double Taxation Avoidance Agreement. It was also held that the amounts were exempt as they were received under the pre-1976 agreement and they were not exigible to tax under section 9(1)(vi) of the Income-tax Act. The Assessing Officer, on the basis of the directions of the Appellate Tribunal rendered earlier, completed the assessment bringing to tax all the items. The Commissioner of Income-tax (Appeals) upheld the order of the Assessing Officer and ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ja, learned counsel for the assessee. The question that has been referred to us deals with the order of the Appellate Tribunal holding that the amounts are not taxable within the meaning of section 9(1)(vi) of the Income-tax Act. Though the Appellate Tribunal has considered the claim of the assessee and held that some of the receipts are exempt under the Double Taxation Avoidance Agreement, the Revenue has not challenged that part of the order of the Appellate Tribunal. Though we are of the view that the reference referred to us has become academic in the absence of any challenge to the said finding of the Appellate Tribunal, we have gone into the merits of the matter. As far as the receipts for visit of technicians are concerned, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the receipt was a lumpsum payment, the amount received is exempt under the proviso to section 9(1)(vi) of the Income-tax Act. We therefore hold that the Appellate Tribunal was correct in holding that the amount received for special engineering services is not taxable within the meaning of section 9(1)(vi) of the Income-tax Act. As far as royalty on export sales is concerned, that amount is also exempt under section 9(1)(vi) of the Income-tax Act. Though the royalty was paid by a resident in India, it cannot be said that it was deemed to have accrued or arisen in India as the royalty was paid out of the export sales and, hence, the source for royalty is the sales outside India. Since the source for royalty is from the source situate outs ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
