TaxTMI 
TaxTMI 
2004 (6) TMI 273
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on payments made to non-resident parties for overhaul of its air-crafts, engines and components etc. She however held that such payments to the residents of UK and USA are not chargeable to tax keeping in view the provisions of the DTAAs with those countries. The Assessee is in the appeal before us for all the three years. The Revenue is in appeal for Financial Years 1998-99 to 1999-2000 only. As the issues are common in all the three years, these appeals are disposed of by a consolidated order. 2. The remaining three appeals are by assessee against sustenance of penalty under section 271C for these three years. We will take first the appeals of the assessee and department in regard to levy of interest under section 201 and 201(1A). 3. The brief facts of the case are that the assessee is a domestic company which had acquired four Boeing Cargo Aircrafts in mid-1997 from a foreign company. The assessee obtained license from the Director General of Civil Aviation (DGCA), the licensing authority, to operate these aircrafts on international routes only. It also engaged crew, technical personnel, engineers and other ground staff and wet-leased the aircrafts to a foreign cargo comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for technical or included services" as per the relevant Article 12 of the DTAA read with the Memorandum of Understanding with USA which equally applied to the UK Treaty. Payments made to the residents of USA and UK were held to be 'business profits' and since those companies did not have a PE in India, their income was not chargeable to tax. The Revenue is in appeal against the order of the CIT(A) on this point. 5. Both the assessee and Revenue have raised several grounds of appeal. The learned counsel has filed written submissions on issue-wise. Thereafter the counsel of the assessee argued grounds issue-wise and attention of the Bench was drawn on various documents placed on record. These documents are in shape of copy of agreement; copy of written submissions; details of payments; detail of receipts. Attention of the Bench was drawn on various case laws relied upon by him. The counsel of the assessee has also invited attention of the Bench on issue-wise written submissions placed on record. On the other hand, the learned DR. strongly relied upon the orders of Assessing Officer and the findings of CIT(Appeals) to the extent the order of the Assessing Officer was confir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l take up first the Issue No. 1. In support of the plea that the payments to the non-resident workshops are not chargeable to tax under the provisions of the Act, the assessee has raised three pronged grounds, which are discussed under Issue Nos. 1(a), 1(b) & 1(c). Issue 1(a) "Whether payments made to the foreign companies are for execution of normal maintenance repairs without any involvement of or consultation with the assessee, and therefore these do not tantamount to "fees for managerial, consultancy or technical services" as defined in Explanation 2 to section 9(1)(vii) of the Act?" 7. This issue goes to the root of the controversy. The company operates aircrafts which it had acquired in the middle of 1997 from a foreign company. It had wet-leased these aircrafts to another foreign company. The CIT(A) has held that the major payments were covered by a comprehensive 'Technical Support Services Agreement' as per attachment 'A' of the Contract with Technik. She held that services rendered by Technik were not in the nature of routine repairs as they involved modification of aircraft and its designing for airworthiness etc. which involved knowle....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... per the terms of the charter party. 10. The Government of India is party to several International Conventions governing the maintenance of the aircrafts. Those under the Aircraft Act of India, 1934 read with Aircraft Rules, 1937, the necessary regulatory and enforcement powers have been delegated by the Government to the DGCA, which issues notifications and guidelines etc. from time to time in regard to the maintenance and upkeep of aircraft. Every aircraft operator has to strictly abide by these guidelines. Failure to do so would result in immediate withdrawal of the license and the aircraft would be grounded. It is stated that since the assessee was under obligation to keep the aircrafts in flying condition, it had to maintain them in accordance with the guidelines of DGCA so that it would have a valid airworthiness certificate without which it would not be possible to carry on the business. It is explained that the engineering department of the assessee would constantly track the flying hours of every component. That before the expiry of flying hour, component for overhaul repairs which ordinarily would also involve replacement of parts would be dismantled by the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....: (i) engineering work which include airworthiness (ii) directives and alert services (iii) development design and modification (iv) familiarization course. 13.1 It was contended that the CIT(A) has failed to appreciate that the Art. 2 of the Agreement clearly states that such services would be provided by Technik at the request of the assessee only. It is submitted that the agreement that the responsibility for keeping the aircraft in a state of airworthiness is that of the assessee. Ld. Counsel emphasized before the CIT(A) that these services were not availed of by the assessee and no payment was made on this account. Ld. Counsel took us through the invoices raised by Technik which were filed with the CIT(A) (contained in assessee's Paper Book B), to show that no payment was made for any of those services. It was submitted the modification of an aircraft including development design is an extremely rare event occurring when the manufacturer (Boeing in the present case) finds something seriously wrong with the aircraft of a particular model and issues an international alert. Every licensing authority including DGCA insists that the prescr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k (involving overhaul of the entire aircraft) and later for flying the aircraft back after the overhaul. The crew's lodgings etc. in UK were arranged for by the ATC Lasham and were billed to the assessee. It was explained to the CIT(A) that no hotel bills were paid for by Technik, as it overhauled components only. The components were flown to Technik facilities in Germany with airway bills without any personnel of the assessee accompanying them. However, in so far as payments to ATC, UK are concerned, the CIT(A) has herself finally held that these payments did not constitute 'fees for technical services' as per the provisions of the DTAA with UK. It was further stated that the assessee did not pay any hotel bill for any personnel of Technik as no employee of Technik ever visited India for supervising repairs or any consultancy service to the assessee. 15. It was explained that as per the International Conventions, every component containing rotable parts is allotted a unique identity number and its historical record is maintained in a tag which accompanies the component throughout its life. Such component including engines needs to be overhauled periodically in accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 ITR 861, wherein the Hon'ble High Court has observed that "it is most inappropriate to equate the rendering of a service with carrying out a work" and that, "rendering of a professional services" which is otherwise described as carrying on a profession is in contrast to the concept of 'carrying on any work'. Reference was also made to the Supreme Court decision in the case of Hindustan Aeronautics Ltd. v. State of Karnataka [1984] 55 STC 314, wherein the contract for maintenance repairs of aircrafts have been held to be works contract. Reliance was also placed upon the decision of Hon'ble Supreme Court in the case of State of Madras v. Ganon Dunkerley & Co. (Madras) Ltd. [1958] 9 STC 353 and Builders 'Association of India v. Union of India [1989] 73 STC 370 wherein it was held that works contract constitute a class of contracts in which the contractor either himself or through his employee uses certain expertise in performing the work for achieving the task contracted for. That it is in the process of achieving such a task that the contractor utilises his expertise. That when the work is carried out on an inanimate object without any participation or interacti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nes status reports on a weekly basis, and any unusual airworthiness related defect. Sochata France was also to provide "engineering management programme and training at Sochata facilities." It is contended that for the contracted consideration, Sochata was obliged to render such services without any request from Sahara. That the payments were admittedly made to Sochata for such services. The Ld. Counsel submitted a chart, comparing the terms of Sochata Sahara Contract vis-a-vis the Technik contract. A copy of this chart was also given to the Ld. DR and he has not disputed the contents. The chart is reproduced below:- Comparative Chart of terms of contract between Sochata France & Sahara Airlines vis-à-vis Lufthansa Technik, Germany & LCI S. No. Sochata-Sahara Contract Art II Technik LCI Contract PB II (1) (2) (3) A. Repairs Engineering coordination overall material co-ordination. Repairs of engines and components. No engineering or material co-ordination B. Provide parts incorporated into equipment in the course of repairs. Provide parts under separate and independent individual contracts of loan/exchange or sale. Material used durin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nent to any authorised workshop in any other country as indeed it often did so. A. (1) Labour at US$ 48 per man hour For work performed for repair, overhaul etc., charges will be as per Techniks prevailing man-hour rates. (2) On-site technical assistance service on a case by case basis. No technician visited India. B. (1) New parts, material and supplies at list price plus 10.5% handling charges. For material consumed list price +25%. (2) Used serviceable parts at 8.5% of the list price. New or old parts to be loaned or exchanged or sold under separate contracts for each and every such part on (1) Rental of 5% of Unit Price + 1% of the price per day for first ten days and 1.5% of the listed price per day (pp. 437 and 438 of PB III). (2) In case of sale list price + 75%. (3) Cost of packing, custom duty, taxes and forwarding to be borne by the customer. Optional Service No Optional service. All support services including training is covered by the consideration under the contract. The entire management of inventories and maintenan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The Ld. Counsel also pressed into service Circular No. 715 dated8-8-1995issued by the CBDT in the context of section 194C of the Act. He submits that the CBDT has clarified that routine maintenance repair jobs are in the nature of 'works contract' and not "contract for technical services". Question No. 29 of the circular reads as under:- "Ques. 29.: Whether a maintenance contract including supply of spares would be covered under section 194C or 194J of the Act? Ans: Routine, normal maintenance contracts which include supply of spares will be covered under section 194C. However, where technical services are rendered, the provision of section 194J will apply in regard to tax deduction at source". (Reproduced from pg. 6530 of Chaturvedi & Pithisaria's Income Tax Law, Fifth Edition, and Vol. 4). It was submitted that Technik carried out normal maintenance repairs including supply of spares, and therefore, had Technik been a domestic-company the payments to it would be covered by the provisions of section 194C and not by the provisions of section 194J, which cover fees for technical services as defined in section 9(1)(vii). The Ld. Counsel contends that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)(vii) of the Act. He drew our attention to the various findings recorded in the orders of the CIT(A). 23. We have considered the rival submissions and have duly considered the orders of the authorities below and the materials on record. The case of the Department is that the fee paid to Technik is covered by Explanation 2 to section 9(1)(vii) of the Act, which reads as under:- Explanation 2.- For the purpose of this clause 'fees for technical services' means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head 'Salaries'. The Explanation defines fees for technical services to mean that any payments made to a non-resident for rendering services like 'managerial' 'technical' or 'consultancy' services would be treated as "fees for technical services". The three types of services envisaged ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... work covered under this Agreement is performed at established airline standards. This warranty obligates Lufthansa Technik to remedy a defect free of charge at one of Lufthansa Technik's basis Hamburg or Frankfurt, provided a detailed claim is raised within 9 months or 1250 flight hours after redelivery to the Customer, whichever may be first. The Customer agrees to arrange, at his own risk and expense, for transport of such parts." Article 12 'Excusable Delays' "Lufthansa Technik shall not be held responsible for excess of performance dates and/or non-performance of the agreed work." If unforeseen major defects on airframe, systems, power plants or components have to be rectified, if material ordered from suppliers is temporarily or definitely not supplied, etc..." Article 14 Legal Provisions 14.1 "This Agreement shall be subject to, and construed exclusively in accordance with, the existing laws of the Federal Republic of Germany. The exclusive place of jurisdiction for any legal actions that should arise out of, or in connections with, this Agreement shall be Hamburg/Germany. 14.3 The place of delivery and redeli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tract has been brought out either by the Assessing Officer or by the CIT(A).Ld. DR has also not cited any instance of payment for any of the optional service enumerated in Attachment 'A' and 'B'.Ld. DR also could not controvert that payments to Technik were made for specific job work of repairs and replacement of parts, and no technician was assigned to India for consultancy or supervision of repairs. We are therefore of the view that simply because Attachment 'A' and 'B' stipulate charges for optional services, it cannot be said that any payment is attributable to such services. These services are optional and could be performed on specific request by the assessee. On the facts brought out before us such option was not exercised by the assessee. Ld. DR also could not indicate any clause in the Technik Agreement which would oblige the assessee to pay the fees towards optional services even if such an option is not exercised by the assessee. In the circumstances, we hold that CIT(A) was not correct in making attachments 'A' and 'B' of the Technik Contract as the basis for concluding that the payments were primarily made for rendering o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... time as stipulated in Annex A1 of the GTA. For material consumed the Customer shall be charged, with the manufacturer's list prices plus a material handling surcharge of twenty five (25) per cent. Subcontracted work in the sense of Article 4 of the GTA shall be charged according to the amount payable by Lufthansa Technik to the subcontractor plus a handling charge of ten (10) per cent plus transportation costs, if any. In case of repair work the Customer shall pay a minimum charge per event of DM 1,000. 28. The law relating to works contracts has been judicially reviewed recently by the Supreme Court in the case of Hindustan Shipyard Ltd. After discussing the law on the subject, the Apex Courtin para 15 of the judgment observe: "There may be three categories of contracts: (i) The contract may be for work to be done for remuneration and for supply of materials used in the execution of the work for a price; (ii) It may be a contract for work in which the use of the materials is ancillary or incidental to the execution of the work; and (iii) It may be a contract for supply of goods where some work is required to be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut them through the machines. Technik carries out these activities in the normal course of its business at its facilities in Germany without any involvement of the assessee. From the facts placed on record it appears that there is absence of human element as there is no interaction between the technicians of Technik and the assessee's personnel. This is further supported by the fact that the components are sent for repairs along with airway bills and are redelivered in the same manner and the invoices are raised by Technik with reference to specific job-works and supply of parts etc. The payments by the assessee are clearly business receipts in the hands of Technik. We will now consider the decisions relied on by the Assessing Officer and the CIT(A). 31. The first decision is that of CBDT v. Oberoi Hotels India (P.) Ltd. [1998] 231 ITR 148 (SC) wherein the Supreme Court has held that professional services like recruitment and training of staff, promotion of the business of the Hotel in Nepal, and running and management of the hotel were in the nature of professional services. The Apex Court held that the expression 'technical services' embraces professional servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....boratory sent the report after due evaluation of the samples. The evaluation report was utilized by the Indian Company in its refining business. That case clearly involved consultancy services of technical nature. The evaluation report of the American laboratory is in the nature of technical advice. For this reason Kerala High Court held that the payment made to the American Company was covered by the provisions of section 9(1)(vii)(b). We may add that this decision was given under section 9(1)(vii)(b) of the Act, as there was no DTAA with USA at that time. 34. As regards the decision of Hyderabad Bench in the case of Mannesmann Demag Lauch hammer, the case of the Department was that the fees paid to DEMAG was covered by section 9(1)(vii). After setting out Explanation 2 to that section, this reads as follows: "Explanation 2: For the purposes of this clause 'fees for technical services' means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services including the provision of services of technical or other personnel but does not include consideration for any construction assembly, mining or li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Hon'ble High Court affirming the aforesaid decision of the Tribunal held that the Explanation 2 has expanded the scope of section 9(1)(vii)(b) by providing that the services of technical or other personnel would be taxable. It has been repeatedly stated by the assessee that no foreign Technician was ever deputed to India. The lower authorities and the DR. have not pointed out any instance of a technician having been assigned to India. This decision therefore is of no assistance to the Revenue. 35. As regards, the CBDT Circular No. 715 (para 20) it is clear that the clarification given in Question 29 deals not only with section 194C, but also section 194J of the Act. Section 194J clearly includes within its ambit the 'fees for technical services' as defined in Explanation 2 to section 9(1)(vii)(b). The section 194J reads as under:- "(1) any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of- (a) fees for professional services, or (b) fees for technical services Explanation-for the purposes of this section,- (a)............... (b) 'fees for tec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....would mean 'sum' on which income-tax is leviable. In other words, the said sum is chargeable to tax and could be assessed to tax under the Act. The consideration would be-whether payment to the sum of the non-resident is chargeable to tax under the provisions of the Act or not?" 37. In conclusion, Technik carried out the repair work in the normal course of its business in Germany, without any involvement or participation of the assessee's personnel. The overhaul repairs involved were routine maintenance repairs. It cannot therefore be said that Technik rendered any managerial, technical or consultancy service to the assessee. In this view of the matter, we hold that the payments made by the assessee to non-residents workshops outside India do not constitute payment of fees for managerial, consultancy or Technical services as defined in Explanation 2 to section 9(1)(vii). The assessee succeeds on this ground. Issue No. 1(b) "Whether payments for repairs of aircrafts was made for earning income from sources outside India and therefore to be excluded from 'fees for technical services' under section 9(1)(vii)(b) of the Act"? 38. The assessee&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....S dollars with the Citibank, Connaught Circus, New Delhi allowed to be maintained by the RBI for this purpose. (iv) Payments made to foreign companies for repairs have a direct nexus with the earning of income from sources outside India. (v) Payments were made to Technik etc. for maintenance repairs which were essential for earning income from the activity of wet-leasing of aircrafts. (vi) The CIT(A) is not correct in rejecting the claim merely because leasing income was not received exclusively from LCAG, but also from other foreign airlines. Articles 2 & 3 of the contract with LCAG make it clear that it is only when LCAG informs the assessee in writing well in advance that it may not require certain capacity for a particular period that the assessee is free to wet-lease the aircraft to others for that period. In case, the assessee is not able to do so, and the aircrafts and crew remain idle, the LCAG would have to pay the rent for minimum guaranteed block hours. The assessee is not free to lease the cargo space to a third party without prior permission of the LCAG. 40. In support of the contention that the income was earned from sources outside India....
X X X X Extracts X X X X
X X X X Extracts X X X X
....raction of receipt is from an Indian party, it cannot provide the Revenue justification for holding that the income is not earned from sources outside India. It is contended that the income from Shareef Travel is so insignificant (0.2%) that it should be ignored. In the alternative, it is submitted that at most 0.2% of the aggregate payments to Technik etc. would be taxable. 42. Income can be said to have been earned from a 'source of income' outside India if the source from which the income is derived is situated outside India. In the context of an international transaction source can be said to be 'outside India' if:- (i) the payer is a non-resident, or (ii) the contract with non-resident is made outside India; or (iii) the activity yielding income takes place outside India. It was submitted that all the three conditions are satisfied in the present case. The payers are non-resident, the wet-leasing contracts are made outside India and the income-yielding activity of wet-leasing has been carried on outside India. It is pointed out that the Article 10.6 of the LCAG contract relating to 'Governing Law' clearly states that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ire case law relating to situs of the 'source of income' in the context of international transactions, it is stated in para 6.28 of the decision:- 6.28 Elaborating the work 'source', it was stated that it may encompass the payer of income or the activity which gives rise to the income. To be more precise it was stated that source could not refer to the payer but only to the activity, which resulted in the income. It was explained that the source is the activity which results into the income. If the source of any income is situated in India then it is irrelevant whether the business carried on by such non-resident is in India or elsewhere: "We are agreeable that the source does not refer to the person who makes the payment but it refers to the activities which give rise to the income. In the present context the activity which is resulting into income in the hands of non-resident customers, namely the TV channels, is the ultimate viewership of the programmes transmitted by them through the assessee in the footprint areas including India. Therefore the activity which actually produces the income is not the uplinking or downlinking of the sign....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ire period of this Agreement. LCI shall ensure that Aircraft registrations and authorizations are suitable to perform flights to all countries set forth in the flight schedules hereunder. LCI shall maintain the Aircraft during the term of this Agreement in accordance with LCI's maintenance program and schedule as approved by the Civil Aviation Administration of India or any such program or schedule mutually agreed upon between the parties. All flights operated under this Agreement shall be performed under the operational control of LCI in all respects. LCI shall obtain and maintain throughout the term of this Agreement all necessary licenses and permits required for any operation of the Aircraft under this Agreement. 10.6 Governing Law This agreement shall be governed by and construed in accordance with, and any and all disputes arising out of, in connection with or in relation to this Agreement shall be decided exclusively in accordance with German law with reference to the choice of law provisions thereof. Any disputes arising from or in connection with this Agreement shall be finally settled by internal consultation and/o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agreed upon in this Capacity Agreement, LCAG shall guarantee to LCI a payment totalling the amount of 960 (nine hundred and sixty) Block Hours performed under this Agreement per calendar month. Should the number of Block Hours actually performed during a calendar month fall short of the number of Block Hours being in the minimum Block Hours guaranteed by LCAG, the rate (Rate B) for such Block Hours not actually performed for reasons not proved to be under the control of LCI shall be US-$ 1,225 (US-$ One Thousand Two Hundred and Twenty-Five) per Block Hour. 47. The following conclusions can be drawn from the above quoted terms of the LCAG contract: (i) The assessee has to maintain the crew and keep the aircrafts in airworthy state. (ii) The assessee company earns rental income on block-hours basis. (iii) The assessee cannot wet-lease the aircrafts to a third party without a written permission from the LCAG. (iv) In case of non-utilisation of aircrafts by the LCAG, it has to pay minimum guaranteed rental 240 block-hours per month in accordance with Clause No. 2.2 read with, Annexure 3 of the contract. (v) The amount of leasing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... hire of the ship, that the amount was payable irrespective of what use the ship was put to by the time charterers or, indeed, whether it was put to any use at all and that no part of the payment can be said to have been made on account of the carriage of goods." 50. The above quoted passage is clearly applicable to the facts of the case. The sources from which the assessee has earned income are therefore outside India as the income earning activity is situated outside India. It is towards this income earning activity that the payments for repairs have been made outside India. The payments therefore fall within the purview of the exclusionary clause of section 9(1)(vii)(b). Thus, even assuming that the payments for such maintenance repairs were in the nature of fees for technical services, it would not be chargeable to tax. 50.1 We allow the assessee's appeal on this point by holding that the payments for repairs of aircrafts was made for earning income from sources outside India and, therefore, to be excluded from 'fees for technical services' under section 9(1)(vii)(b) of the Act. Issue 1(c) "The payments have been utilized in the assessee'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utside India. 53. We have carefully considered the rival submissions and we have also gone through the annual accounts of the assessee for the Financial Years ended 31-3-1998, 31-3-1999 and 31-3-2000 respectively, filed in the Paper Book. The question whether a business is carried on in India or outside India cannot be decided by the situs of the Head Office or the place of control of the business. The assessee, being an Indian company, would have the Head Office or the place of control in India. We agree that the assessee's business of wet-leasing of aircrafts has been predominantly carried on outside India. However, it cannot be said that the entire business has been carried on outside India. The assessee's business of wet-leasing of aircrafts is composed of a number of operations such as acquisition of aircrafts, wet-leasing, maintenance of crew and engineering personnel, aircrafts maintenance and establishment, etc. It is settled law that profits of a business cannot be said to accrue only in the place where sales take place or the revenue is earned, but they arc embedded in each distinct operation of the business, both on the revenue and the expenditure side. For th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly 100% of the Revenues were earned outside India and the aggregate direct expenditure incurred outside India is about 71%, and another 10% should at least be attributed to the business outside India on account of Head Office expenses incurred in India. 55. Normally, we would have referred the matter to the Assessing Officer to verify the figures arid work out the apportionment on a reasonable basis. However, we need not go into this arithmetical exercise because we have already held that the payments made to Technik and other foreign companies for maintenance repairs are not in the nature of fees for technical services as defined in Explanation 2 to section 9(1)(vii)(b). Further, in any event these payments are not taxable for the reason that they have been made for earning income from sources outside India and therefore fall within exclusionary clause of section 9(1)(vii)(b). 56. In view of our decision allowing the main ground relating to chargeability of tax, the alternate grounds have become academic. We therefore do not propose to go into them though considerable arguments were advanced on the alternate grounds. 57. We now take up the appeals filed by the Revenue. ....