2024 (6) TMI 218

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....he order passed by the Assessing Officer as well as by the CIT (Appeals) and partly allowed the appeal preferred by the assessee holding that the assessee was not required to deduct tax at the rate of 20% for the payments of Rs. 8,58,75,000/- to the Technoprom export (hereinafter to be referred as 'TPE') and further directed the AO to grant refund to the assessee (State Trading Corporation) of the tax recovered from the assessee @ 20% from the payments made to the TPE. 2. Learned counsel for the revenue submits that ITAT has fallen in error in holding that the consideration paid for the preparation of the technical documentations, working designs, testing models of equipment and other technical purposes, would not fall within the definitio....

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....g technical assignments and other documents which were handed over by the TPE to the assessee, has not been treated as 'Royalty' by the appellant. 6. However, the expenditure incurred in Russia for preparation of technical documentation, working drawings testing models of equipments and other technical purposes, has been wrongfully assesssed by the assessing officer as well as CIT (A) to be as a Royalty and 20 per cent tax deductable on the same has been wrongly imposed. 7. It is his submission that since the said expenditure incurred was not for the purpose of providing any information to the answering respondent, and was to be put to use at the territory of Russia alone and not to be handed over to the STC i.e petitioner, the said expen....

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....concerning technical, industrial, commercial or scientific knowledge, experience or skill; [(iv-a) the use or right to use, any industrial, commercial or scientific equipment but not including the amounts referred to in section 44-BB; (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or (vi) the rendering of any services in connection with the activities referred to in [sub-clauses (i) to (iv), (iva) and (v)] Explanat....

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....tailed above relating to the technical assignments under the documents to be handed over to STC which would be treated to be as Capital Assets. The other expenditure incurred was to be treated as Royalty. 11. We are unable to accept the interpretation taken by the CIT (A) and find that ITAT has succinctly examined the said aspect. 12. The contention of learned counsel for the appellant that as the Royalty means consideration to be paid for imparting of any information concerning technical industrial commercial or scientific knowledge, experience or skill, we have to understand that the said imparting of any information has to be conveyed to the assessee. Since, the information which was gathered by the TPE at Russia was to be handed over ....