9911796707
TMI Blog2020 (3) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... ance services. The solutions provided by the Petitioner are used by the oil and gas industry in relation to excavation, extraction, production activities and seismic analysis. 3. Petitioner opted to be taxed on presumptive basis under section 44BB(1) of the Act, whereby 10% of the aggregate of receipts is deemed to be profits and gains of business and is subjected to tax. The assessee filed its return of for the assessment year 2012-2013, declaring a total income of Rs. 19,71,61,430/- arising inter alia, from the business of providing services or facilities in connection with extraction or production of mineral oils. The case was picked up for scrutiny and notice under Section 143(2)/142(1) was issued by the Assessing Officer (hereinafter, 'AO'). Eventually, the AO held that in accordance with terms of the contract, the nature of services provided by the Petitioner fell within the purview of Royalty/ Fees for Technical Services (hereinafter, referred to as 'FTS') and is liable to be taxed under section 44DA instead of section 44BB, and proposed to compute the total income of Petitioner at Rs. 4,92,90,360/- as against total income of Rs. 1,97,16,140, offered to tax by the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 44D of the Act would be liable to be taxed under Section 44BB(1) of the Act, if it was in connection with extraction or production of mineral oils, since Section 44BB is a special provision. Mr. Kaushik further elaborated his submissions by making a detailed analysis of the decision of the Supreme Court in the case of ONGC v. Commissioner of Income Tax & Anr (supra). He submitted that in the said case, the court considered an identical issue as to whether such services/facilities fall within the purview of Section 44BB, or Section 44D of the Act. The nature of services involved in the said case comprised of the following: "1. Carrying out seismic surveys and drilling for oil and gas. 2. Services starting/re-starting/enhancing production of oil and gas from wells 3. Services for prospecting for exploration of oil and or gas 4. Planning and supervision of repair of wells 5. Repair, Inspection or Equipment used in the exploration, extraction or production of oil and gas 6. Imparting Training 7. Consultancy in regard to exploration of oil and gas 8. Supply, Installation, etc. of software used for oil and gas exploration" (Emphasis supplied)" 7. Mr. Kaushik a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintenance for such software. These activities are carried out at the backend and can be done from any place. There is no need for this software to be deployed on-site or drilling-site and, therefore, the Petitioner cannot derive benefit of Section 44BB of the Act. Further, Petitioner is not transferring the ownership in the software to the purchasers vis-a-vis Oil India ltd. (OIL), ONGC, RIL etc. It only grants a licence to use the said software as per Clause 1, Section II of Contract No. CONT/GL/GPHY/275/10-11 dated 14.7.2011 between the petitioner and OIL, a Govt of India enterprise. He also refers to Clause 4 of the Work order No. 048/31035461 dated 5.4.2011 from RIL, (Software License Agreement) to purchase Order No. 048/7272379 from RIL. Thus, the services provided by the Petitioner fall under the broad definition of Royalty which is defined under Explanation 2 to section 9(1) clause (vi) and, consequently, the same will be assessed under Section 44DA. It was further submitted that supply of software was held to be "Royalty" by the High Court of Karnataka in the case of Commissioner of Income Tax v. Synopsis International Old Ltd. (2012) 28 taxmann.co 162 (Kar). He also subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NANCE ACT, 2010. 11. The pivotal controversy in the present case surrounds the interpretation of Section 44BB and 44DA of the Act. These provisions have undergone amendments over the years, the last one being introduced by the Finance Act, 2010. Since assessee has argued at length that this legal position remains unaltered, we feel that this aspect in law needs to be clarified as it would also be germane for the decision in the present case. It is, thus, imperative to first examine the effect and consequence of the said amendments, particularly to determine if the legal position has undergone any change with respect to the applicability of the provisions, after the effective date i.e. April 01, 2011 since the return of income filed by the Petitioner pertains to the assessment year 2012-13. For the sake of convenience, the relevant provisions are reproduced hereunder: Inserted by the Finance Act, 1987 w.r.e.f. 1-4-1983"Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. 44BB. (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee, [being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd natural gas. "Special provision for computing income by way of royalties, etc., in case of non-residents. Inserted by Finance Act, 2003 w.e.f 1-04-2004 44DA. (1) The income by way of royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by a non-resident (not being a company) or a foreign company with Government or the Indian concern after the 31st day of March, 2003, where such non- resident (not being a company) or a foreign company carries on business in India through a permanent establishment situated therein, or performs professional services from a fixed place of profession situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed place of profession, as the case may be, shall be computed under the head ―Profits and gains of business or profession in accordance with the provisions of this Act : Provided that no deduction shall be allowed, -- (i) in respect of any expenditure or allowance which is not wholly and exclusively incurred for the business of such per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing contained in this clause shall apply in relation to so much of the income by way of royalty as consists of lump sum payment made by a person, who is a resident, for the transfer of all or any rights (including the granting of a licence) in respect of computer software supplied by a non-resident manufacturer along with a computer or computer-based equipment under any scheme approved under the Policy on Computer Software Export, Software Development and Training, 1986 of the Government of India. ........................" Explanation 2 (to 6) to Section 9(1)(vi) are relevant and read as follows: "Explanation 2.-For the purposes of this clause, "royalty" means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "Capital gains") for- (i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices" and reads as follows: "(vii) income by way of fees for technical services payable by- (a) the Government ; or (b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India : Provided that nothing contained in this clause shall apply in relation to any income by way of fees for technical services payable in pursuance of an agreement made before the 1st day of April, 1976, and approved by the Central Government. Explanation 1.-For the purposes of the foregoing proviso, an agreement made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date. Explanation 2.-For the purposes of this clause, "fees for techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt situated therein, or performs services from a fixed place of profession situated in India and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with the permanent establishment or fixed place of profession situated in India. One more distinction between sections 44 DA and 44 BB is that, in section 44 BB one does not find any reference to a permanent establishment in India and the services contemplated therein are more specific than what is contemplated in section 44 DA. Thus, Section 44BB is a special provision in so far as it relates to the applicability of the provision in the context of the specified services. Section 44DA applies where such non-resident carries on business in India through a permanent establishment stipulated therein or performs services from a fixed place of profession, such income shall be computed under the head "profit and gains of business or profession" in accordance with the provisions of the Act, subject to the condition that no deduction shall be allowed in respect of any expenditure or allowance which is not wholly or exclusively incurred for the business of such perma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cability of Section 44BB in respect of the income falling within the scope of Section 44DA (1) of the Act. However, now that the proviso has been inserted, it has fundamentally restricted the applicability of section 44BB. This proviso has to be given due consideration and a meaning, recognizing the legislative intent. A plain reading of section 44BB (1) shows that it applies to an assessee who is engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire use, or to be used, in the prospecting for, or extraction or production of mineral oils. However, the proviso thereto carves out an exception that the sub-section shall not apply in a case where the provisions of section 44DA apply for the purpose of computing profits or gains or any other income referred to in those sections. Further, a reading of section 44DA makes it clear that it applies to the character of income which is in the nature of royalty or fees for technical services. The legislative intent behind the amendment is also evident from the memorandum to the Finance Bill 2010 which reads as under: "Under the existing provisions contained in section 44BB(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2011-12 and subsequent years." This proviso reinforces the legislative intent to carve out an exception to the character of the income referred to in this section i.e. royalty and fees for technical services. The principles relating to interpretation of statute, emphatically lay down that statute should be interpreted to preserve the legislative intent. A reading of the overall scheme of section 44BB and 44DA leaves no manner of doubt that section 44BB applies if the assessee is engaged in the business of providing services or facilities in the prospecting for, or extraction or production of minerals oils. However, if income earned by such assessee takes the color of royalty or FTS, then the computation for the purposes of determining "profits and gains of business or profession" is to be done as per the provisions of section 44DA of the Act. Therefore, now in the current scenario if the income of the assessee is Royalty or FTS, then the same would be taxed under Section 9(1)(vi)/(vii) read with Section 115A or 44DA, as the case may be. Judgments relied upon by the Parties 17. Now, let us reflect upon the case laws relied upon by the parties. In Oil and Natural Gas Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid explanation will not include payments made in connection with a mining project. xxxxxxxxxxx 13. The Income Tax Act does not define the expressions "mines" or "minerals". The said expressions are found defined and explained in the Mines Act, 1952 and the Oil Fields (Development and Regulation) Act 1948. While construing the somewhat pari materia expressions appearing in the Mines and Minerals (Development and Regulation) Act 1957 regard must be had to the provisions of Entries 53 and 54 of List I and Entry 22 of List II of the 7th Schedule to the Constitution to understand the exclusion of mineral oils from the definition of minerals in Section 3(a) of the 1957 Act. Regard must also be had to the fact that mineral oils is separately defined in Section 3(b) of the 1957 Act to include natural gas and petroleum in respect of which Parliament has exclusive jurisdiction under Entry 53 of List I of the 7th Schedule and had enacted an earlier legislation i.e. Oil Fields (Regulation and Development) Act, 1948. Reading Section 2(j) and 2(jj) of the Mines Act, 1952 which define mines and minerals and the provisions of the Oil Fields (Regulation and Development) Act, 1948 spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;Furnishing supervisory staff with expertise in operation and management of Drilling unit. 5. 729 Capping including subduing of well, fire fighting. 6. 738 Capping including subduing of well, fire fighting. 7. 1528 Analysis of data to prepare job design, procedure for execution and details regarding monitoring 8. 1532 Study for selection of enhanced Oil Recovery processes and conceptual design of Pilot Tests. 9. 1520 Engineering and technical support to ONGC in implementation of Cyclic Steam Stimulation in Heavy Oil Wells. 10. 2794 Assessment and processing of seismic data along with engineering and technical support in implementation of Cyclic Steam Stimulation. 11. 1524 Conducting reservoir stimulation studies in association with personnel of ONGC. 12. 1535 Laboratory testing under simulated reservoir conditions. 13. 1514 Consultancy for optimal exploitation of hydrocarbon resources. 14. 2797 Consultancy for all aspects of Coal Bed Methane. 15. 6174 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rilling project management. 41. 2796 Training in Safety Rating System and assistance in development and audit of Safety Management System. 42. 1239 To develop technical specification for 3D Seismic API modules of work and to prepare bid packages. 43. 1527 Supply supervision and installation of software which is used for analysis of flow rate of mineral oil to determine reservoir conditions. 44. 1523 Supply, installation and familiarization of software for processing seismic data. The above facts would indicate that the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non- resident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery on hire, used or to be used, in the prospecting for, or extraction or production of mineral oils including petroleum and natural gas. Section 44DA is also a provision which applies to non-residents only. It is, however, broader and more general in nature and provides for assessment of the income of the non-resident by way of royalty or fees for technical services, where such non-resident carries on business in India through a permanent establishment situated therein or performs services from a fixed place of profession situated in India and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with the permanent establishment or fixed place of profession. Such income would be computed and assessed under the head "business" in accordance with the provisions of the Act, subject to the condition that no deduction would be allowed in respect of any expenditure or allowance which is not wholly or exclusively incurred for the business of such permanent establishment or fixed place of profession or in respect of amounts, if any, paid by the permanent establishment to its head office or to any of its othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, a flat rate of 10% of the revenues received by the non-resident for the specific services rendered by it are deemed to be profits from the business chargeable to tax in India under Section 44BB, whereas under Section 44DA, deduction of expenditure or allowance wholly and exclusively incurred by the non-resident for the business of the permanent establishment in India and for expenditure towards reimbursement of actual expense by the permanent establishment to its head office or to any of its other offices is allowed from the revenues received by the non-resident. Because of the different modes or methods prescribed in the two sections for computing the profits, it apparently became necessary to clarify the position by making necessary amendments. That perhaps is the reason for inserting the second proviso to sub- section (1) of Section 44DA and a reference to section 44DA in the proviso below sub-section (1) of Section 44BB. A careful perusal of both the provisos shows that they refer only to computation of the profits under the sections. If both the sections have to be read harmoniously and in such a manner that neither of them becomes a useless lumber then the only way in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing services in connection with prospecting for mineral oils, its income, even if it falls within the ambit of Section 44DA (1) of the Act, would be taxable under Section 44BB (1). However, at the same time, the court considered the effect of the amendments introduced by the Finance Act, 2010 and held as under: "27. The contention advanced on behalf of the Revenue that "fees for technical services" earned by a foreign company in respect of a contract which is connected with the PE of such foreign company in India would be taxable under Section 44DA(1) of the Act, irrespective of whether the same is connected with extraction/production of mineral oils, cannot be accepted. By virtue of Finance Act, 2003, such income was excluded from the ambit of Section 115A(1)(b) of the Act w.e.f. 01.04.2004. Although, with effect from said date such income was taxable under Section 44DA(1) of the Act but in certain cases where such income was earned by the assessee by carrying on a business of providing services in connection with prospecting for, or extraction or production of mineral oils, the said income would also fall within the express language of Section 44BB(1) of the Act and in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 115A(1)(b) of the Act." 20. The aforesaid observations, in our view, rightly interpret the position in law. For that matter, the Petitioner is misinterpreting the earlier judgment of this Court in Director of Income Tax v. OHM (supra), to contend that Section 44BB being a specific provision will override the provisions of section 44DA of the Act. Section 44BB of the Act qualifies a business activity whilst section 44DA applies to the nature of income. Even in OHM Ltd. (supra), the Court has taken a view that is in concurrence with our opinion. In the said judgment, the Court in para 12 notes as under: "12. The second proviso to sub-section (1) of Section 44DA inserted by the Finance Act, 2010 w.e.f. 01.04.2011 makes the position clear. Simultaneously a reference to Section 44DA was inserted in the proviso to sub-section (1) of section 44BB. It should be remembered that section 44DA also requires that the non-resident or the foreign company should carry on business in India through a permanent establishment situated therein and the right, property or contract in respect of which the royalty or fees for technical services is paid should be effectively connected with the perma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of both the provisions or their respective spheres of operation or to take away the separate identity of Section 44BB. We do not, therefore, see how these amendments can assist the Revenue's contention in the present case, put forward by the learned Senior Standing Counsel. We, therefore, agree with the AAR that in the present case the profits shall be computed in accordance with the provisions of section 44BB of the Act and not section 44DA." In the above extracted portion, the court has held that in case the services are in the nature of Royalty or FTS so as to fall under section 44DA, then an assessee is rendering such services as provided in section 44BB, he cannot claim the benefit of being assessed on the basis that 10 percent of the revenue will be deemed to be the profits as provided in section 44BB. This legal viewpoint stands reaffirmed and reinforced in PGS Exploration (Norway) AS v. Additional Director of Income Tax (supra). 21. The upshot of the above discussion is that after 01.04.2011, income falling within the scope of Section 44DA (1) of the Act would be excluded from the scope of Section 44BB of the Act. If the income of a non-resident is in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents for such services to a foreign company, therefore, will be income chargeable to tax under the provisions of section 44BB of the Income-tax Act, 1961 and not under the special provision for the taxation of fees for technical services contained in section 115A, read with section 44D of the Income-tax Act, 1961." This definition of FTS remains unchanged and circular No. 1862 dated 22.10.1990 is still in force. Thus, in a nutshell, if the services provided by the assessee constitute services for "mining or like project", the consideration therefore it would be excluded from the scope of "fees for technical services". It is well settled that when there are two provisions in an enactment which cannot be reconciled with each other, the doctrine of harmonious construction should be applied and attempt should be so interpret the provisions, if possible, giving effect to both. It is the duty of the courts to avoid "a head on clash" between two sections of the same Act and, "whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise." It should not be lightly assumed that "Parliament had given with one hand what it took away with the other". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act, 1961 (the 'Act')." 25. The CIT considered the contentions raised by the Petitioner and rejected the aforesaid ground inter alia holding as under: "On a comprehensive consideration of the entire conspectus of the factual matrix of the case and the extant legal position on the issues involved, there is no merit in Ground Nos. 1 & 2 of the assessee i.e. Claim of applicability of Section 4488 to the assessee's receipts instead of Section 44DA adopted by the Assessing Officer & estimating income @ 25% of the Gross revenue/ receipts and is therefore rejected. The natures of services rendered are not even wholly connected to drilling and prospecting. The logic of the ONGC decision does not apply in this case. In any case, the 44DA adopted by the Assessing Officer & estimating income @25% of the Gross revenue/ receipts and is therefore rejected. The natures of services rendered are not even wholly connected to drilling and prospecting. The logic of the ONGC decision does not apply in this case. In any case, the provisions of section 44DA read with amended provisions of 9(1)(vi) and 9(1)(vii) clearly indicate that the amount should be assessed under section 44DA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly hired by Oil and Gas exploration companies such as ONGC; Reliance Industries Ltd. Gujarat State Petroleum Corporations; Oil India Ltd etc. for availing the aforesaid services. It has been further noted in para 4.3 (a) that "the services of the assessee prima facie appear to be covered by judgment of the Apex Court in the case of ONGC v. CIT (supra), as it is one of the 44 work/activity identified by the Court for applying Section 44BB instead of Section 44D". Reference here may be made to the judgment of the Supreme Court in the case of ONGC (supra). In the said case, the Court applied the doctrine of pith and substance in respect of each contract/agreement, to ascertain whether the dominant purpose of the agreements was prospecting, extraction or production of mineral oils. On that basis, the Court held that the payments made by ONGC and received by non-resident assesses or foreign companies under the contracts is more appropriately assessible under the provisions of Section 44BB and not Section 44D of the Act. The relevant portion of the said judgment reads as under: "12. The second proviso to sub-section (1) of Section 44DA inserted by the Finance Act, 2010 w.e.f. 01.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in nature and fall under the sub-section read with Explanation 2 to Section 9(1)(vii) of the Act, then an assessee rendering such services as provided in Section 44BB cannot claim the benefit of being assessed on the basis that 10% of the revenues will be deemed to be the profits as provided in Section 44BB. In other words, the amendment made by the Finance Act, 2010 w.e.f. 01.04.2011 in both the sections, cannot have the effect of altering or effacing the fundamental nature of both the provisions or their respective spheres of operation or to take away the separate identity of Section 44BB. We do not, therefore, see how these amendments can assist the Revenue's contention in the present case, put forward by the learned Senior Standing Counsel. We, therefore, agree with the AAR that in the present case the profits shall be computed in accordance with the provisions of section 44BB of the Act and not section 44DA." 27. The aforesaid observations of the Supreme Court, where an identical issue was involved, has not been appreciated in the right perspective by the CIT. If the nature of services rendered have a proximate nexus with the extraction of production of mineral oils, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words used are clear, unambiguous, merely because it is a fiscal legislation, the meaning cannot be narrowed down and it cannot be interpreted so as to give benefit to the assessee only. Then it would be re- writing the section, under the guise of interpreting a fiscal legislation, which is totally impermissible in law. When the legislature has advisedly used the words 'in respect of', the intention is clear and manifest, the said phrase being capable of a broader meaning, the same is used in the section to bring within the tax. net all the incomes from the transfer of all or any of the rights in respect of a copyright. Thus, it was held that license fee for use of software amount to transfer of all or any of the rights in respect of a copyright. m) When licence is granted to allow use of the software by making copy of the same and to store it in the hard disk of the designated computer and to take back up copy of the software, it is clear that what is transferred is right to use the software, an exclusive right, which the owner of the copyright i.e., the licensor owns and what is transferred is only right to use copy of the software for the internal business as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax v. Intrasoft Ltd. (2014) 220 Taxman 273 (Del). We need not go into this vexed question at this stage because of lack of clarity on facts. 30. In the assessment order, the assessing officer has taken note of the contracts entered into by the Petitioner with other parties. A perusal of the same indicates that such contracts are in the nature of annual maintenance contract of upgradation, maintenance in support of software licenses; supply of software; AMC for software. The nature of activity/scope of services under the contract executed by the Petitioner with various companies also indicates the same position. The relevant portion of the order reads as under:- "The nature of activities/scope of work under the contract with various companies is found to be as follows:- a. Under the contracts/service orders With Calm India Ltd scope of work includes "AMC for Paradigm Software" provided by the assesee alongwith AMC for renewal of Paradigm Software and supply of ''Paradigm Software license". b. Under the contracts/service orders with ONGC Ltd. MAT/IMP/E""/2(769)/2009-10 scope of work includes providing service» for up-gradation, maintenance and support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the services rendered. The assessee has not segregated its activities into supply of software and maintenance/support services. The entire income derived under the contracts was offered for taxation under section 44BB. Revenue in its note of arguments has contended that 'supply of software' is 'royalty' and 'other services' are 'FTS' and accordingly Petitioner is liable to pay tax under Section 44DA of the Act. Whether the services of updating the software/renewal of license or warranty services or maintenance of software are inextricably and essentially linked to the supply of the software and are ancillary services is a question of fact that would require determination after examining the dominant purpose of such contracts. In our opinion, there is no factual clarity on this aspect. We do not find any such distinction/segregation that can be inferred with respect to the receipts in the hands of the assessee under the contracts executed by it, referred above. The CIT being a fact-finding body has failed to give a reasoned order with respect to the nature of income and its subsequent application. Directions 32. In view of the afore-going discussion, we set aside the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concern before the 1st day of April, 1976, shall not exceed in the aggregate twenty per cent. of the gross amount of such royalty or fees as reduced by so much of the gross amount of such royalty as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process or trade mark or similar property; (b) no deduction in respect of any expenditure or allowance shall be allowed under any of the said sections in computing the income by way of royalty or fees for technical services received from an Indian concern in pursuance of an agreement made by the foreign company with the Indian concern after the 31st day of March, 1976. Explanation : For the purposes of this section, - (a) "fees for technical services" shall have the same meaning as in Explanation to clause (vii) of sub-section (1) of section 9; (b) "foreign company" shall have the same meaning as in section 80B; (c) "royalty" shall have the same meaning as in the Explanation to clause (vi) of sub-section (1) of section 9; (d) ro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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