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TMI Blog2005 (5) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... rested in buying knitted garments we help them by locating suitable and reputed manufacturers of like products in Tirupur." (b) Negotiating: "We help in finalizing prices between our international clients of various market levels and the manufacturers". (c) Quality controlling: "Once orders are finalized by our client, it is our responsibility to ensure that the orders are executed by the manufacturers in such a manner that the product is of the buyers required quality stands. We have a team of quality controllers who monitor the quality of goods at all stages of production and ensure that the end product that is exported is upto our client's expectations." (d) Shipping logistics: "We also ensure that the goods are shipped as scheduled which is of prime importance to our client owing to the nature of business. For these purposes we have separate shipping coordinators who advise proper shipping procedures to the manufacturers so as to enable proper dispatch of goods and documents and advise the buyer of the shipment details." 3. Before the Assessing Officer, the ld. A.R. of the assessee relied on the decision of the Hon'ble Supreme Court in the case of CBDT v. Oberoi Hotels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 700 of the CBDT is not accepted as applicable in this case, the fact that is that the services of the assessee have been rendered partly abroad and partly in India and exemption under section 80-O is applicable to the services rendered outside India. For practical reasons the services rendered in India and outside may be taken as equal and relief granted. 5. The ld. CIT(A) relying on the order of his predecessor in earlier years held that the activities of the assessee indicate that the services were rendered in India and therefore the assessee was not be eligible for deduction under section 80-O. He also observed that the circular issued by the CBDT does not provide that services rendered 'from India' will include services 'in India'. He was also of the view that the facts of the case decided by the Hon'ble Supreme Court relied upon by the assessee were distinguishable from the facts of the assessee's case. 6. Before us the ld. AR of the assessee argued that the interpretation of section 80-O made by the Assessing Officer and CIT(A) is not proper. The cases decided by courts of law and circular of the CBDT indicate that 'services' need not be carried out outside India. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable if gross total income of: (i) an Indian company or a person resident in India. (ii) includes any income by way of royalty or commission, fee or similar payments. (iii) from the Government of foreign state or foreign enterprises. (iv) in consideration for the use outside India. (v) of any patent, invention, model, design, secret formula or process or similar property right, or information concerning industrial, commercial, or scientific knowledge, experience or skill etc., and the income is received in India or brought into India in convertible foreign exchange within the specified period, such assessee will be entitled to deduction @ 50 per cent of such income included in gross total income. 9. From a plain reading of the provisions of section 80-O, it is clear that income received in convertible foreign exchange should have nexus with services rendered concerning any patent, invention, model design, industrial/commercial information etc. to a foreign enterprise or Government of foreign State and such information is used by such foreign party outside/from India. In the instant case, the assessee's claim is that it has rendered professional and technical servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e month notice." 10. A perusal of terms and conditions enumerated in the agreement, it is clear that the assessee had provided services to M/s. Perimark as a buying agent. The assessee under the terms of appointment as a buying agent was required to locate the manufacturers, suppliers of products and supply of samples of goods and fabric, ensuring quality control during production; monitoring the progress and chasing of orders, etc. The assessee as per terms of agreement was the representative of foreign enterprises in respect of various suppliers. The assessee was to receive commission at the same time when the supplier was paid. Therefore the relationship between the assessee and foreign enterprise was that of principal and agent and for rendering the services as an agent the assessee was paid commission @ 3 per cent of net value of purchases. Further, a letter dated 23-1-1997 from M/s. France Sales Knitwear is also available in the paper book filed by the assessee. As per this letter the assessee in the capacity of buying agent was paid commission @3 per cent on CIF value of goods supplied. Also in brief profile of the assessee, the assessee has introduced himself to the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hases (FOB value) and that too at the time when supplier was paid. In a case where if goods sent by the assessee were not matching with the samples, the consignment would have failed and consequently the assessee would have lost the commission also because the supplier would not get the payment. Therefore the buying agency services rendered as an agent by no stretch of imagination could be considered as professional and technical services which could be used by a foreign enterprise outside/from India. In fact, no information was provided by assessee apart from being a buying agent to foreign enterprises which could be used outside India. 13. The assessee had relied on several decisions in support of his contention that professional and technical services were rendered to foreign enterprises. In case of E.P.W. Da Costa, the assessee entered into agreement with BBC, a foreign enterprise under which the assessee was to undertake an audience research study in Hindi speaking areas in Indian States to assess radio listening habits of people and to use their technical knowledge to advise on a questionnaire in the proposed audience research was held to be entitled for approval by CBDT fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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