TMI Blog1991 (11) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment and order to the extent that it gives to the assessee some relief. The assessee is a Government company incorporated under the Indian Companies Act. It manufactures machine tools and has acquired extensive knowledge, experience and technology in that regard. It entered into an agreement with the Federal Military Government of the Federal Republic of Nigeria for the establishment of a machine tools industry in Nigeria on June 29, 1979. The agreement provided that the Nigerian Government and the assessee would collaborate to incorporate a company under the laws of Nigeria. The company would establish a self-contained factory to manufacture and sell the products specified in the agreement. Under article 4 of the agreement, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g processes of the PRODUCTS. 8. 1. 1. H. M. T. as technical partner shall provide training facilities in India to qualified Nigerians in order to meet the estimated manpower requirements. 8. 1. 2. The terms and conditions for training company personnel in India shall be as specified in Schedule II. Fees and remuneration under the agreement were provided for by article 14. In relation to "Training", article 14.9 provided thus : " 14.9. Training. - In consideration of the services to be rendered by H. M. T. in training the employees of the company in India under article 8, the company shall pay to H. M. T. a fee at the rate of U. S. $230 (two hundred and thirty U. S. dollars only) per training man-month. " Article 15 dealt with " Ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igerian personnel in India would mean service rendered in India and the fees receivable in this respect were not entitled to the benefit under section 80-0. The assessee was requested to show cause in this behalf. On October 8, 1980, the assessee did so. On November 24, 1980, the Board conveyed to the assessee its approval of the agreement for the purposes of section 80-0 from the assessment year 1980-81 onwards subject to the disallowance of the amounts receivable under articles 14.9 and 15 thereof. A writ petition was filed to impugn the decision of the Board conveyed to the assessee by letter dated November 24, 1980. The learned single judge (see [1991] 188 ITR 457), by the judgment and order under appeal, held that the assessee was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to such Government or enterprise by the assessee, or (b) in consideration of technical services rendered or agreed to be rendered outside India to such Government or enterprise by the assessee. There is, therefore, no exception made where the agreement creates a trade restriction while otherwise satisfying the requirements of section 80-O. Reference was made by counsel on behalf of the Revenue to Circular No. 187 dated December 23, 1975, issued by the Board setting out guidelines for approval of agreements und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India. The learned judge, as we have noted, took the view that the Nigerian personnel were trained in India and, once they went out of India, it was their skill that was used outside India and not the skill of the assessee, so that the provisions of section 80-O did not apply. Our attention was drawn by Sri Kumar, learned counsel for the assessee, to the decision of the Delhi High Court in J. K. (Bombay) Ltd. v. CBDT [1979] 118 ITR 312. Therein it was held that the service of managing agent rendered by an Indian company to a foreign company was not a technical service within the meaning of section 80-O and that the wider definition of technical service rendered by technicians in other provisions of the Act were limited to the constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rformed when some work of a technical nature is done by the assessee, as for example, in the Bombay case Searle (India) Ltd. [1984] 145 ITR 673 quoted above, of carrying out quality tests of psyllium husk. The imparting of training to the Nigerian personnel by the assessee would seem to us more appropriately to be the imparting to them of information concerning industrial knowledge and skill. The information that is conveyed by the assessee to the Nigerian personnel is so conveyed for use in Nigeria in the manufacture and sale of products under the agreement. In our view, therefore, the provisions of section 80-0 in this behalf are complied with. In the result, the appeal by the Revenue (W. A. No. 2137 of 1990 ) fails and is dismissed. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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