JOINT COMMISSIONER OF INCOME TAX Vs. PETER SALWIEZEK

JUDGEMENT

(1.) THIS appeal by the revenue arises from the order of the learned Commissioner (Appeals) -XXV, New Delhi, dated 17 -12 -1998, raises the following two grounds :

(2.) IN ground No. 1, the learned Departmental Representative states that the assessing officer found that the assessed was employed with M/s G.E. Plastics Europe B.V. (hereinafter referred to as GEPE). His services were assigned to the joint venture company, namely M/s G.E. Plastics India Ltd. The taxes on his behalf have however been paid by the Indian company. The assessed, however, claimed exemption of the income which has accrued to him in India as exempt under section 10(5B) of the Act. He refers to the provision as contained in sub -section (5B) of section 10 and stated that the essentials are : (i) that the person should be an individual, (ii) he renders services as a technician, (iii) he is in the employment of any corporation, etc., set up in India for carrying business in India, and (iv) he was not resident in India in any of the four immediately preceding years in which he arrived in India. The attention was further drawn to the Explanation below section 10(5B) of the Act where "technician" has been defined to be a person employed in India in any capacity in which such specialised knowledge and experience of having manufacturing have actually been utilised.

(3.) IN view of statutory provisions, it was contended that the person should have specialised knowledge or experience which should have been utilised in India in the manufacturing operations. The assessed, however, is a man from marketing and selling. The assessing officer had already recorded such a finding at internal p. 3 of the assessment order. Such a finding was based on the joint venture agreement dated 3 -1 -1996, according to which the main object of the employment of the assessed was initially for marketing and selling the product purchased from M/s GE Plastics and IPCL in India. The assessed, however, also remained an employee of GEPE who have been doing work in the field of marketing and finance in India. Thus, it is evident that the job assigned to the assessed in India is in the field of marketing and selling and not in the field of manufacturing. Further reference was made to the finding recorded by the assessing officer on the basis of personal profile of the assessed as reproduced at internal p. 2 by the assessing officer in his order. In this profile the assessed himself has stated that since April, 1994 he was allocated to GEPE to lead the marketing efforts in this new growth market where through the complete team with local hires complete the ADC facility to highest standards and excite the industry with high class educational seminars. Programs for accelerated growth with industry focus in market development are in place, GE values and work out programs are introduced and practiced. The work experience also shows that he was a director in marketing. The perusal of facts reveal that the assessed is not a technician within the meaning of definition as contained in Explanation to sub -section (5B) of section 10 as he does not have specialised knowledge and experience in the field of manufacturing. His present assignment as a director marketing is to excite industry and the joint venture is only for marketing and selling and not intended to be used for any manufacturing purposes. The learned Commissioner (Appeals) has erred in coming to the conclusion that the assessed is a qualified Chemical engineer who has specialised knowledge and experience and was deputed to India by GEPE India to assist in the development of plastic technology and he was later supervisor of the Application Development Centre which was involved in designing and development and testing of product who after discussion help in developing and manufacturing of new products made of plastics. He has also erred in coming to the conclusion that his experience in manufacturing of polycarbonic technology was used by GEPE for their manufacturing operation in India. This is contrary to the joint venture agreement which clearly says that the joint venture was for the purpose of marketing only. Other findings of the learned Commissioner (Appeals) are not borne out from record. The past experience which has also been made as a basis of coming to his technical experience was only for very brief period as a, training program and the same cannot be conclusive to categorise a person with specialised knowledge and experience in the field of manufacturing. Reference was also made to the Tribunal's order in ITA No. 1619/Del/1997 by 'C' Bench, New Delhi, to paras 28 to 34 according to which the manufacturing has to take place in India and the operation should be carried on in India and to be a technician is a condition for the grant of exemption. All these facts are absent in the appellant's case. Reference was also made to certain advance rulings as under