COMMISSIONER OF INCOME TAX Vs. FOSS ELECTRONIC

JUDGEMENT

(1.) ON this application under Section 256(1) of the IT Act, 1961, (hereinafter referred to as 'the Act'), the Tribunal, Jaipur Bench, Jaipur (for short 'the Tribunal') vide its order dt. 29th July, 1992, has referred the following question for the opinion of this Court :

(2.) THE foreign company, assessee, received a sum of Rs. 1,13,572 and Rs. 1,79,775 during the asst. yrs. 1985-86 and 1986-87, respectively, from the Indian company on account of technical information furnished and technical services rendered i.e., training Indian engineers abroad, deputation of foreign personnel to India to assist the Indian company in initial production of electronic milk analyser. THE ITO charged the tax @ 20 per cent as per the provisions of Section 115A(1)(b)(ii) of the Act.

(3.) MR.Mathur has drawn our attention to the various clauses of the agreement and submits that the amount paid was as technical know-how fees and not as a royalty and, therefore, the CIT has rightly revised the order of the AO and that the tax should be charged @ 40 per cent under Section 115A(1)(b)(iii) of the Act.