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TMI Blog2001 (8) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Income-tax Appellate Tribunal was justified in holding that 1897 paid by BHEL to NEL represented remuneration for services rendered by two of NEL s experts and was exempt under section 10(6)(vi) of the Income-tax Act and did not constitute technical fee taxable under section 9(1)(vii) of the Income-tax Act ? The factual position in a nutshell is as follows : The assessee, Bharat Heavy Electricals is a Government of India undertaking, manufacturing heavy electrical equipment. It needed two experts of National Engineering Lab UK (in short NEL ), for certain experimental and analytical projects at Energy System and New Product division at Delhi. The said division requested NEL UK to make available the services of two consultin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign company represented fee paid for technical services rendered. However, the appeal before the Tribunal was accepted and it was held that the amount was not taxable. For coming to the aforesaid conclusion, the Tribunal recorded the following findings : 5. The question for our consideration is whether the said amount of 1897 was taxable as technical fee paid to the foreign concern or whether it was exempt in terms of section 10(6)(vi). It is true that the foreign concern, in their letter dated April 13, 1977, had stated that assistance was to be provided on consultancy basis and for that the amount that was to be charged was also stated. If this letter alone is taken into account, it could be said that the amount paid to the foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, we hold that the amount of 1897 was exempt from tax. The Income-tax Officer and the learned Commissioner of Income-tax (Appeals) were not justified in holding tax was to be deducted at source by the assessee-company. We allow the appeal of the assesseecompany. On being moved for reference, the question as set out above has been referred for the opinion of this court. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee despite service. Learned counsel for the Revenue submitted that there being no employee and employer relationship between the assessee and the two foreign experts, section 10(6)(vi) had no application and the amount was normally taxable under section 9(1)(vii) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a foreign enterprise for services rendered by him during his stay in India, provided the following conditions are fulfilled- (a) the foreign enterprise is not engaged in any trade or business in India ; (b) his stay in India does not exceed in the aggregate a period of ninety days in such previous year ; and (c) such remuneration is not liable to be deducted from the income of the employer chargeable under this Act ; From the factual position we find that the two persons who came to India were employees of the foreign concern, NEL. This is amply borne out from the observations of the Commissioner of Income-tax (Appeals) on which learned counsel for the Revenue placed strong reliance. From the documents on record, mor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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