1992 (8) TMI 8

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n the island of Sumatra to manufacture various products based on technical know-how and the process package from an American company, Reichhold Chemicals Inc. The petitioners entered into an agreement dated September 4, 1982, with the said Messrs. Holding and Industrial Promotion Ag., which is a company registered in Switzerland, for rendering detailed engineering and technical design services as set out in article 3 of the agreement. Under article 4, it is clearly provided that the Swiss company shall be responsible for the fabrication, construction and operation of the plant at its own expense based upon detailed engineering drawings certified good by the engineer and subject to, the expert advice of the engineer's personnel. Annexure ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....relevant to the assessment year 1983-84 for which there is no application under section 80-O, which is an additional ground for not approving the said application. As far as the first ground is concerned, for reasons which we have set out in our judgment of today's date in Writ Petition No. 957 of 1986 (Davy Powergas India Pvt. Ltd. v. CBDT (No. 1) [1994] 207 ITR 158), the agreement in the present petition does not fall under section 80HHB of the Income-tax Act, 1961. The agreement in the present case is very similar to the agreement in the above case. It is confined to rendering technical services. In fact, the agreement in the present case, in terms, sets out that the work of construction is to be carried out by and is the responsibili....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nally accorded legitimately and properly, as pointed out by us, in respect of assessment years earlier to 1983-84 would enable the assessee to claim like relief under section 80-O for all subsequent years too." In the present case, therefore, applying the ratio of the above Supreme Court judgment, the petitioners have correctly asked for approval for the assessment year in which the full payment is received and for subsequent years. Therefore, if any payments under the contract which fall under section 80-O have been received in the subsequent years also, the assessee would be entitled to the benefit of section 80-O. As far as the language of section 80-O is concerned, the proviso to section 80-O as it stood at the relevant time provi....