9911796707
TMI Blog1987 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... India Ltd. (now called " Toyo India "). After giving the appellants a hearing, the Board rejected the appellants' application by its letter dated March 27, 1981. The Board held that the agreements could not be approved under section 80-0 because they were not made with the Government of a foreign State or a foreign enterprise and because the payments thereunder were not payments from the Government of a foreign State or a foreign enterprise. The order of the Board was impugned in the writ petition filed by the appellants. The learned single judge upheld the contention of the appellants that, under the terms of section 80-0 of the Income-tax Act, 1961, it was not necessary that the agreements should be with the Government of a foreign Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erprise in consideration for the use outside India 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 made available or provided or agreed to be made available or provided to such Government or enterprise by the assessee, or in consideration of technical services rendered or agreed to be rendered outside India to such Government or enterprise by the assessee, under an agreement approved by the Board in this behalf and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court delivered in Writ Petition No. 1764 of 1981, Indian Hume Pipe Co. Ltd. v. CBDT [1987] 165 ITR 537 (Bom), decided on October 14, 1985. The learned judge held that under section 80-0 of the Income-tax Act, 1961, it was not necessary that the agreement should be between the assessee and a foreign party. All that was required was that the assessee should have rendered technical services under an agreement and this agreement should be approved by the Board. It was contended before the learned judge that the payment that has been received by the assessee had been made by an organisation established by the Government of India, pursuant to an agreement between the assessee and that organisation. The learned judge found that the payment h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of a foreign State or a foreign enterprise must be read together. The words " foreign enterprise " must take colour from the words the Government of a foreign State ". The words " foreign enterprise must, therefore, be read to mean an enterprise of a foreign national or of foreign ownership. They cannot be read to mean an enterprise in a foreign land, regardless of its ownership. The words " foreign enterprise " cannot, upon an interpretation of section 80-0 of the Income-tax Act, 1961, be held to apply to an establishment or undertaking or branch or unit of an Indian company in a foreign country. Such establishment, undertaking, branch or unit may well be an if enterprise ", but it is not a " foreign enterprise " within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this aspect. The other aspect, which was canvassed by the respondents before the learned single judge was that the agreement referred to in section 80-0 of the Income-tax Act, 1961, had necessarily to be with the Government of a foreign State or a foreign enterprise. The learned judge disagreed. Mr. Dhanuka learned counsel for the respondents, sought to support the learned judge's order by submitting that it was a necessary implication of the language employed in section 80-0 that the agreement should be with the Government of a foreign State or a foreign enterprise, which the present agreements were not. We are unable to accede to this submission because the section does not specify who the party of the other part of the agreement s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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