DIRECTOR OF INCOME TAX Vs. KRUPP UDHE GMBH

JUDGEMENT

(1.) ADMIT.

(2.) THE appeal by the Revenue against the order of the Income Tax Appellate Tribunal for assessment year 1998-1999 raises the following three questions of law :

(3.) IN appeal, the Tribunal dealt with the issue as regards the payment of fees received by the assessee and of the reimbursement of expenses separately. In so far as the receipt of fees was concerned, the Tribunal noted that the assessee had deputed its technicians for inspection of the equipment. Inspection could not be done unless the personnel deputed had technical knowledge in respect of the equipment to be inspected. Consequently the fees received by the assessee were held to amount to fees for technical services. In so far as the issue of reimbursement is concerned, the Tribunal held that though there was a conflict between the judgment of the Kerala High Court, which was relied upon by the Commissioner of Income Tax (Appeals) and the judgment of the Calcutta High Court in the case of CIT V/s. Dunlop Rubber Company Limited (142 ITR 493), it would follow a view which was favourable to the assessee, consistent with the judgment in Vegetable Products Limited 88 (ITR 192).