1985 (2) TMI 6

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.... in India and in taxing the assessee foreign company ? " However, we find on the facts and circumstances of this case, that the question sought to be referred does not arise out of the order of the Tribunal. The assessee is a non-domestic foreign company and the Bharat Heavy Electricals Limited, Tiruchirapalli, has been treated as its agent. In pursuance of the terms of an agreement, the non-domestic foreign company deputed a few of their personnel to India to provide expert technical assistance to the Indian company in connection with the manufacture of certain articles which as per the terms of the agreement, the Indian company had been licensed to manufacture. In consideration of such services, the non-resident foreign company was ....

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....ffect from June 1, 1976, no portion of the technical fees paid could be brought to charge thereunder. The Tribunal, however, proceeded on the basis that the technical fees received by the foreign company will come only under section 9(1)(vii) and not under section 9(l)(i), and as the applicability of section 9(1)(vii) depends upon the date of the technical collaboration agreement that was entered into, it posed the question as to whether the agreement providing for the payment of technical services was approved by the Central Government before April 1, 1976, or not. After considering the materials on record, the Tribunal held that the collaboration agreement has got the approval of the Central Government as early as on May 3, 1974, and, the....

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....)(vii) refers to income by way of fees for technical services payable by the Government or a resident company or non-resident company in certain circumstances. For the purpose of appreciating the relevant scope of section 9(1)(i) and section 9(1)(vii), the proviso to section 9(1)(vii) cannot be looked into. As already stated, section 9(1)(i) is general in nature and section 9(l)(vii) refers to a particular type of income and is a special provision dealing with fees for technical services rendered by the foreign company. The technical services may be rendered as a result of a business connection or otherwise. Having regard to the language used in section 9(1)(vii), it is not possible to construe that provision as referring to income by way o....