TaxTMI 
TaxTMI 
2008 (4) TMI 12
X X X X Extracts X X X X
X X X X Extracts X X X X
....deduction of Rs. 3,20,81,836/- under Section 80-O of the Income Tax Act, 1961 (for short as Act ). However, as positive income was shown at Rs.1,40,50,080/-, the deduction under the above provision was restricted to the income shown. The Assessing Officer was however of the view that the assessee has merely rendered managerial services not of technical nature and thus requirement of Section 80-O of the Act was not satisfied. The Assessing Officer thus denied the deduction claimed by the assessee. 3. On appeal filed by the assessee, the CIT(A) held that services rendered by the assessee are professional and / or technical services and view taken by the Assessing Officer that technical servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of the Act and therefore, covered under Section 80-O of the Act. Further, the services rendered to the foreign principal no doubt originate in India but terminate outside India only when the foreign client is communicated the contents and factum of rendition of services. It is also submitted that even if the benefit of the services was utilized by the foreign principals to further their business interest in India, the services rendered by the assessee were to be regarded as rendered from India in the terms of the Circular of Central Board of Direct Taxes, No.700 dated 23^rd March, 1995. 7. Learned counsel in support of his contentions has cited a decision of this Court in The Commissioner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r in consideration of technical or professional services rendered or agreed to be rendered outside India to such Govt. or enterprise by the assessee, and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction of an amount equal to fifty percent of the income so received in, or brought into, India in computing the total income of the assessee. Explanation: For the purposes of this section-(iii....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; The word technical has been defined in the Oxford Dictionary to mean, inter alia, of or involving or concerned with mechanical arts and applied sciences; of or relating to a particular subject or craft etc. or its techniques, requiring special knowledge to be understood. 15. The Supreme Court in Continental Construction case (supra) explained the scope of the term technical services as follows: .the expression technical services has a very broad connotation and it has been used elsewhere in the statue also so widely as to comprehend professional services: vide Section 9(1)(vii) referred to earlier. But we need not digress on this aspect for two reasons. Firstly, whatever,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Learned counsel for the assessee has also placed reliance on Central Board of Direct Taxes, Circular No.700 dated 23.3.1995, which reads as under:-Deduction under section 80-O of the Income Tax Act, 1961clarification regarding.Section 80-O of the Act, provides for a deduction of 50 per cent from the income of an India resident by way of royalty, commission, fees or any similar payment from a foreign Government or enterprise:- (a) in consideration for the use outside India of any patent, invention, model, design, secret formula or process, etc; or (b) in consideration of technical or profession services rendered or agr....