2001 (12) TMI 8

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.....-The question which has been raised in this appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), is the interpretation of "royalty" as envisaged under Explanation 2 appended to section 9(1) of the Act. By reason of this Explanation which provides that the income specified therein shall be deemed to accrue or arise in India specifies six items which would c....

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....the consideration for design on the one part and engineering, manufacturing shop testing, packing up to f.o.b. port of embarkation. In that view of the matter, in our opinion, the transfer of design, if any, vis-a-vis other would not come within the purview of the said Explanation. This aspect of the matter is covered by a Division Bench judgment of the Madras High Court in the case of CIT v. Neyv....

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....price which covers all the stages involved in the supply of machinery from the stage of design to the stage of commissioning. The design supplied is not to enable the assessee to commence the manufacture of the machinery itself with the aid of such design. The limited purpose of the design and drawings is only to secure the consent of the assessee for the manner in which the machine is to be desig....

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.... the design of the equipment required to be manufactured by the supplier abroad and supplied to the purchaser. The information concerning the working of the machine is only incidental to the supply as the machinery was tailor-made for the buyers. Unless the buyer knows the way in which the machinery has been put together, the machinery cannot be maintained in the best possible way and repaired whe....