COMMISSIONER OF INCOME TAX Vs. EROPPINO GIOVANNI G

JUDGEMENT

(1.) THE assessment years we are concerned with are 1971-72, 1972-73, 1973-74 and 1974-75. THE two assesses involved in the assessment proceedings are individuals who are not citizens of India. THEy, at the relevant time, were the employees of one company in Italy by name ANSALDO. ANSALDO had entered into a collaboration agreement with the Fertilizers and Chemicals Travancore Ltd., for short "FACT", a Government of India undertaking incorporated under the Companies Act, 1956, for the construction of an ammonia plant. During the pendency of this collaboration agreement, another Italian company by name Societa Italiana Impianti (hereinafter called "SII") succeeded to the business and interest of ANSALDO. THE assessees thereupon became the employees of SII and this succession to the business and interest of ANSALDO by SII was recognised by the FACT.

(2.) AS per Clause 3.19 of the agreement, SII shall make available at the plant site competent technicians and manufactures' specialist erectors for supervision of site fabrication and erection and commissioning of such major equipment/machinery as may be mutually agreed upon. Consistent with this clause, the assessees were deputed by SII to do the work. By Clause 4.2, the FACT has to pay SII at the rates given in exhibit 2 attached thereto for each day of absence of the assessees from their usual place of work in Italy for getting themselves engaged in the work the company had undertaken in connection with the installation of the ammonia plant for the FACT. AS regards the liability for tax, it is provided thus in Clause 5.1 of the agreement :

(3.) AGAINST these orders, both the assessees and the Department filed appeals before the Appellate Tribunal. The Appellate Tribunal, after considering the case of both the assessees and the Department in extenso, entered, inter alia, the following findings :