1998 (3) TMI 22

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e expenditure in computing the income of the assessee for the assessment year 1974-75. The assessee is a manufacturer of cranes. It had, in response to a tender, floated by the Cochin shipyard offered to design, manufacture, supply and erect crane of 150 tonnes capacity. The petitioner had not manufactured a crane of that capacity earlier and the purchaser, Cochin shipyard, having insisted upon the petitioner involving a reputed foreign crane manufacturer at all stages from the stage of design to the time of erection. The petitioner entered into an agreement with a German company for obtaining design and drawings, as also for the supervision in India of the manufacture and of the erection of the crane at the Cochin shipyard. The agreemen....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ane, it will be proper to entrust them the work of supervision during manufacture and also erection, directly by you so that the entire responsibility is taken by Chitram." In the agreement between the assessee and its collaborator, their respective positions were described as general contractor and sub-supplier. The relevant part of the recitals in the agreement reads as under : "Chitram and PHB/JUCHO will process this contract. Chitram acting as general contractor and PHB/JUCHO as sub-supplier for the engineering and for the assignment of supervising staff for the fabrication in India as well. Supervising of the fabrication in India does not relieve Chitram from its responsibility for the proper operation of the items supplied by th....