Commissioner Of Income-Tax vs Chemical And Metallurgical ...
2001 Latest Caselaw 1131 Del

JUDGMENT

1. Pursuant to the directions given by this court, the following question has been referred at the instance of Revenue under Section 256(2) by the Income-tax Appellate Tribunal (in short "the Tribunal") for the opinion of this court. "Whether, on the facts and in the circumstances of the case and on a proper construction of the notification No. S. O. 3210, dated August 8, 1969, issued by the Central Government, the Tribunal was right in holding that the provisions of Section 104 of the Income-tax Act, 1961, are not applicable to the assessed for the above assessment years ?"

2. The dispute relates to the assessment years 1968-69 and 1969-70.

3. Learned counsel for the Revenue submitted that the question is confusing and the number of the notification as shown in the question is not correct. We find that the correct notification as noted by the Tribunal is dated June 6, 1967. The dispute related to action under Section 104 of the Act for non-declaration of dividend for two assessment years. The crucial question which fell for determination was whether the fee received was for services rendered outside India. The stand of the Revenue is that practically most of the activities were done in India and there was a very small part of the action which was done outside India.

4. We find from the order of the Tribunal that it has taken note of certain factual aspects and has recorded the following conclusions which are essentially factual in nature.

"The design, technical know-how and services which were rendered to the foreign company were all received and utilised in Cuba, i.e., outside India. The expression in the notification dated June 6, 1967, 'services rendered outside India' is clearly satisfied in the present case since the technical know-how and the services were received and utilised in Cuba. Besides the above we have observed that even if the technical report was prepared in India and

more of the man hours in preparing this report was used in India, the report itself would not have been of any use if it was not given to the company at Cuba for the establishment of the plant there. Since the technical report was utilised at Cuba and the payment that were received by the assessed-company was received on account of the utilisation of that report at Cuba, we do not think as to how it could be said that the services were rendered in India. In the circumstances, we do not see any justification on the part of the authorities below to have disallowed the claim of the assessed and in creating additional demands of Rs. 61,950 for the assessment year 1968-69 and Rs. 5,12,240 for the assessment year 1969-70."

5. The above being the factual position, no question of law arises out of the order of the Tribunal, and we decline to answer the question referred.