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TMI Blog2006 (6) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... source of income. When the customer of company i.e. associate company is located outside India than it cannot be said that source of income is not outside India. It is not the case of the revenue that associate company was importing the goods but is mentioned that assessee-company was making exports. Fees paid for getting the patent registered in Hongkong is for making or earning income from a source outside India. The Legislature has used the word making or earning income. The income of the assessee-company is profit from sale to associate company and such sale is a part of marking of income. Making an assessment has been held to cover the whole period during which assessment is made. Keeping in view the fact that patent was regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of watches and jewellery. The watches manufactured by the assessee are sold under the name Titan . The assessee has registered its patent in his name. Watches manufactured by the assessee are sold in India as well as in several countries aboard. M/s. Titan Watches and Jewellery International (Asia Pacific) Pvt. Ltd. (TAPL) is an associate company incorporated in Singapore and this company promotes sale of Titan Watches in the Asia Pacific region. From the business point of view, it was considered desirable to register the company s name in Hongkong. This was done through M/s. Chang Leung Hvi Li CPA Ltd. Such registration enable TAPL to operate in Hongkong and promote sale of the assessee s products in Hongkong. For the services ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associate company, Titan Watches and Jewellery International (Asia Pacific) Pvt. Ltd. incorporated in Singapore. It was not advisable to allow the distributor to get the patent registered in his name as such patent right is a valuable right. Professional services were rendered in Honkong and the concern to whom payment has been made has given a declaration that they do not have any place of business in India. Hence, payment were not taxable in the hands of recipient and no tax was required to be deducted. 6. The learned DR supported the order of authorities below : 7. We have heard both the parties. Section 9(1)( vii )( b ) is as under : "( vii ) income by way of fees for technical services payable by ( b ) a person who is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income is not a legal concept but it must mean something which a practical man regard as a real source of income. When the customer of company i.e. associate company is located outside India than it cannot be said that source of income is not outside India. It is not the case of the revenue that associate company was importing the goods but is mentioned that assessee-company was making exports. 10. Fees paid for getting the patent registered in Hongkong is for making or earning income from a source outside India. The Legislature has used the word making or earning income. The income of the assessee-company is profit from sale to associate company and such sale is a part of marking of income. Making an assessment has been held to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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