9911796707
TMI Blog1983 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... r Corpn. Ltd., on 4-8-1975, in accordance with which the appellant company agreed to render to the Indian company "such technical assistance in the shape of supervision of detailed engineering, supervision of construction and erection, and assistance in start-up and commissioning of the said newsprint plant and/or factory . . . on the terms and conditions and in the manner hereinafter appearing . . .". Article I of the agreement defined the nature of assistance. According to it, the appellant company were to render, furnish and/or make available to the Indian company 'in India' certain engineering, management, consultancy and other assistance for the use and benefit of the Indian company. One of such services to be rendered was "supervision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultants in completion of the work not completed during the design development phase of the project. The above 'resident Sandwell staff' were also required to provide proper guidance and assistance for the detailed design work carried out by the Indian companies, Indian consultants and the construction work carried out by the Indian company's contractors, who were to provide guidance and assistance for the commissioning of the plant. Sub-clause (r) of clause 1 of article II provided, inter alia, that "All such engineers, supervisors, technicians, consultants, surveyors, staff, labourers or artisans shall be under the client's overall direction and control. Such personnel shall be bound by any advise, direction and/or instructions to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments were of two types, the first being known as time charges, and the second being the other charges. Time charges provided for in paragraph 1 of article IV, were to be paid by the Indian company to Sandwell, i. e., the assessee-company. In addition to the said time charges, the Indian company was to provide the following to the resident staff of Sandwell vide clause 3 of article IV : (a) A living allowance of Rs. 3,000 per month to those resident engineers that would be staying in India alone, and Rs. 4,000 per month to those resident engineers that would be staying in India with their families. (b) A free furnished house for each employee. (c) A car and driver for every two resident staff. (d) Return air fare. (e) An allowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant entered into another agreement on 4-8-1975 which came to be known as 'Detailed Designs & Constructions Supervision Agreement'. This was approved by the Central Government. The agreement provided for imparting technical information and rendering services outside India through its own personnel and inside India through personnel to be deputed by the appellant for employment with Hindusthan Paper Corporation Limited. The ITO has stated that only technical know-how fees received in India is taxable. The amount of such receipts was dollars 64,460.95 out of which a sum of dollars 23,189.97 has been paid as salary to technicians employed by Hindusthan Paper Corporation Limited under the second Agreement. The ITO has proceeded to compute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the technicians of the assessee-company in India. There is no merit whatsoever in the assessee's contention that the technicians in question were the employees of the Hindusthan Paper Corpn. Ltd. In terms, it has been stated in the agreement that the employees were 'Sandwell resident staff' and for making available their services the assessee-company was paid by the Indian company the time charges as per the agreement. The said time charges have direct nexus with the services rendered by the technicians in India and, therefore, it has to be held that the said income was earned in India and it accrued and arose on account of the services rendered by the technicians in India. Their assessment was, in the circumstances, entirely justified. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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