1990 (7) TMI 40

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....ia among other matters. Article 15.1 of the agreement speaks about the payment of royalty which is at the rate of 2 per cent. of the value added for seven years in respect of the right granted to the Nigerian Government for exclusive use in that country and other ECOWAS (Economic Community of West African States) countries as provided in articles 4.1 and 4.1.1. The first respondent took the view that the same is a trade restriction on the petitioner and the consideration in respect of that restriction is outside the scope of section 80-O of the Act and, therefore, declined to grant approval so as to entitle them for deduction under section 80-O of the Act. On the question of training Nigerian personnel in India as provided in article 4.1 re....

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....by both parties. 4.1.1 HMT shall permit the COMPANY to use such trademark and/or name and to exhibit HMT logo at such appropriate places as HMT may authorise during the duration of this agreement." And royalty in relation thereto is dealt with in article 15.1 of the agreement, which reads as follows : " 15.1 Royalty shall be paid at the rate of 2 per cent. of value added for 7 years for granting the exclusive rights to the COMPANY for Use in ECOWAS countries the technical information, know-how, designs, trade mark, logo and to manufacture and sell units of each PRODUCT from the first sale of each PRODUCT." What is provided under article 4.1 is only a right of manufacture of products as may be selected by the Nigerian Government in consu....

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....er that it was done under a mistaken impression and the same was corrected by sending a letter dated October 8, 1980, as per annexure-F. But, what is to be seen is whether training Nigerian personnel in India is a service rendered in India and, therefore, does not attract the deduction provided under section 80-O of the Act as held by the Board or in any other manner does not come within section 80-O of the Act. Learned counsel for the petitioner urged before me that it is not case of rendering technical service at all inasmuch as the assessee is not rendering any service but, on the other hand, is imparting skill and expertise in the matter of handling machinery and, therefore, it clearly falls within the first limb of section 80-O of the ....