1998 (3) TMI 107

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....ribunal was right in holding that applicant was not entitled to the exemption under article (III)(1) of the DTA agreement?" The facts of the case are that the assessee is a non-resident company having its place of business at Frankfurt in West Germany. The assessment year is 1982-83. During the previous year, relevant to the assessment year 1982-83, the assessee had received Rs. 2,85,362 from the Indian companies towards the services rendered by its technical personnel. The case of the assessee is that a double taxation agreement was entered into between India and West Germany and this amount is exempted from taxation in India and, accordingly, he is not liable to pay the tax. On the other hand, it is the contention of the Revenue tha....

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....eptional difficulties the profits attributable to the establishment may be estimated on a reasonable basis. (3) For the purposes of this agreement the term 'industrial or commercial profits' shall not include income in the form of rents, royalties, interests, dividends, management charges, remuneration for labour or personal services or income from the operation of ships or aircraft but shall include rents or royalties in respect of cinematographic films." By reading the above article, it is manifest that the tax shall not be levied on the industrial or commercial profits of an enterprise in that other territory. Then the question arises what is the meaning of industrial or commercial profits. Sub-clause (3) of article III has defined....

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....same is not excluded, it cannot be inferred that there is exclusion. The second question that arises for consideration is whether it amounts to management charges. Management charges are quite different from the amounts paid towards technical services. Management charges are paid for managerial supervision or managerial functions done by the concerned person or the company. Therefore, by the wordings management charges itself cannot be taken as rendering technical services unless a particular agreement is shown that management charges include the technical services as managerial duty. In this case, it is not brought to our notice that there is any such agreement which includes the technical service as managerial duty. Therefore, we are n....