9911796707
Advanced Search 
TMI Blog2002 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... s. An Iraq Government company known as a State Company for Rubber Industries, Baghdad (SCRI), sought for technical assistance of the petitioner pursuant whereto 16 specialists were deputed for the purpose of sharing experience for running the factory as also for improving and developing technical and managerial skills of its personnel as also to participate in the practical application of the planned technology. On the ground that providing of such technical assistance would entitle the petitioner to claim deduction under section 80-O of the Income-tax Act, 1961, an application was filed for approval of the said agreement dated August 10, 1977, before the prescribed authority on September 27, 1978. By reason of the impugned order dated De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m certain foreign enterprises.--Where the gross total income of an assessee, being an Indian company, or a person (other than a company) who is resident in India, includes any income received by the assessee from the Government of a foreign State or a foreign enterprise in consideration for the use outside India of any patent, invention, design or registered trade mark and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign exchange; (ii) 'foreign enterprise' means a person who is a non-resident (iii) 'services rendered or agreed to be rendered outside India' shall include services rendered from India but shall not include services rendered in India; (iv) 'competent authority' means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange." The aforementioned provision envisages "any income by way of royalty, commission, fees or any similar payment". It is trite that only because the contract does not specifically assign the nomenclature mentioned therein, the same would not be determinative of the claim to exemption/deduction by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me speciality and he may agree to lend his services to some other person and stipulate a consideration therefor which may be variously described. The nature of the asset, right, information or services which can be brought under this provision may be varied and the consideration stipulated for allowing another to avail of the assessee's asset, knowledge or services can likewise assume multifarious forms. The word 'similar' connotes that the payment made to the assessee need not be in the nature of royalty, commission or fees only ; it could be any payment of like nature, i.e., made in consideration for the use or supply of such an asset, knowledge or services in the same manner as royalty, fees or consideration could be. We are, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x or tax deduction can hardly be made to depend on the label given to it by the parties. An assessee cannot claim deduction under section 80-O in respect of certain receipts merely on the basis that they are described as royalty, fee or commission in the contract between the parties. By the same token, the absence of a specific label cannot be destructive of the right of an assessee to claim a deduction, if, in fact the consideration for the receipts can be attributed to the sources indicated in the section. Contracts of the type envisaged by section 80-O are usually very complex ones and cover a multitude of obligations and responsibilities. It is not always possible or worthwhile for the parties to dissect the consideration and apportion ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
