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Issues Involved:
1. Jurisdiction of the Assistant CIT under section 163. 2. Legality of holding the appellant as an agent of non-residents under section 163. 3. Taxability of reimbursement of expenses to non-residents. 4. Applicability of section 163(1)(c) for treating the appellant as an agent of non-residents. 5. Taxability of salary and perquisites provided to non-residents. 6. Exemption of travel expenses under section 10(14). Detailed Analysis: 1. Jurisdiction of the Assistant CIT under section 163: The appellant contested the jurisdiction of the Assistant CIT under section 163 of the Income-tax Act, 1961. The Tribunal upheld that the Assistant CIT had the jurisdiction to issue the show-cause notice under section 163 for treating the company as an agent of the two non-resident technical personnel. 2. Legality of holding the appellant as an agent of non-residents under section 163: The appellant argued that there was no privity of contract between the appellant company and the engineers, and thus, the appellant could not be treated as an agent. The Tribunal found that the provisions of section 163 were not dependent on the privity of contract. The requirement under clause (c) of section 163 was that the non-resident should be in receipt of certain income directly or indirectly, which was satisfied in this case. 3. Taxability of reimbursement of expenses to non-residents: The appellant contended that the reimbursement of travelling expenses did not constitute taxable income. The Tribunal upheld the CIT(A)'s view that reimbursement of travelling expenses is included in the definition of taxable income under the Income-tax Act. 4. Applicability of section 163(1)(c) for treating the appellant as an agent of non-residents: The Tribunal examined the agreements and concluded that the appellant was rightly treated as an agent under section 163(1)(c). The income earned by the non-residents through the appellant was taxable in India, and the appellant was under an obligation to bear the cost of the technical personnel after the plant was commissioned and started commercial production. 5. Taxability of salary and perquisites provided to non-residents: The Tribunal upheld the Assessing Officer's computation of salary and perquisites for the non-residents, including the value of rent-free accommodation and travel expenses. It was held that the salary income for services rendered in India was liable to tax in the hands of the appellant as an agent of the non-residents. 6. Exemption of travel expenses under section 10(14): The Tribunal agreed with the appellant's contention that the reimbursement of actual travel expenses incurred for the performance of duties was exempt under section 10(14). The orders of the authorities below were modified to exclude the amount of air travel expenses from the income. Conclusion: The Tribunal dismissed the appeals regarding the orders under section 163 and upheld the treatment of the appellant as an agent of the non-residents. However, it partly allowed the appeals related to assessments under section 143(3), directing the exclusion of air travel expenses from the taxable income.
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