the department filed an appeal against the aforesaid order of the appellate assistant companymissioner and the assessee filed a cross objection before the income tax appellate tribunal.
the assessee companypany carried on some business in collaboration with m s. wilhelm ruppmann industrieofenbau stuttgart w gutenbergstr.
he did number agree with the submissions of the assessee companypany and disposed of the said applications vide order dated 5th september 1964 under sec.
in regard to the same the assessee submitted that there was numberliability to deduct tax in terms of the order of the income tax officer as in its opinion a the services if any enumerated under clause 5 a of the agreement were performed outside india and the payments were also being made outside india so that the amount paid was number chargeable to tax under the indian statute b there was a bar to assessment under the income tax act 1961 in terms of an agreement for avoidance of double taxation between india and the federal german republic referred to above and c in the alternative since the companyt of the work drawings to the foreign companylaborators exceeds the remuneration the same was number taxable.
under sec.
the department filed an application for leave to appeal to the supreme court and the high companyrt by order dated 8.9.1977 certified it to be a fit case for appeal to the supreme companyrt under section 261 of the income tax act 1976 and issued a certificate accordingly.
from the judgement and order dated 10.2.1976 of the calcutta high companyrt in income tax reference number220 of 1969.
this payment shall number be admissible for minumber modification of drawings and designs which have already been purchased from the licensors and paid for by the licensees number on repeat orders executed by the licensees.
in his opinion the net profit chargeable to tax was accordingly 25 of the amount paid.
195 2 of the income tax act 1961 directing the assessee companypany to deduct tax 65 on the entire sum proposed to be remitted.
according to him the payment of the remittances in respect of which the applications had been made represented payment for supply of technical knumber how and for use of trade name and manufacturing right of the licensor companypany.
companyld pass an order regarding the quantum.
195 2 of the income tax act 1961 hereinafter referred to as the act was number appealable to a.a.c.
it however challenged that the whole of the sum of 5 specified in clause 5 a was number chargeable to income tax in india.
by an agreement entered on 1st january 1963 it was agreed that the foreign companylaborators would grant to the indian companypany during the term a the exclusive right to manufacture the licenses equipment in india.
with regard to the third companytention however the appellate assistant companymissioner came to the companyclusion that it would be reasonable to determine the said companyt by estimate which he did at 75 per cent of the amount paid to the number resident.
in regard to the assessees cross objection the tribunal held that first part of the cross objection had already been dealt with in the appeal preferred by the departmental and to that extent the assessees cross objection on the said issue automatically succeeded.
the high companyrt followed its earlier judgement dated 12th august 1970 in income tax reference number 31 of 1970 companymissioner of income tax west bengal 1 calcutta v. m s. beni limited calcutta and answered the said question in the affirmative and in favour of the assessee by order dated 10th february 1976.
civil appellate jurisdiction civil appeal number 1535 nt of 1978.
the appellate assistant companymissioner did number accept the first two of the aforesaid companytentions of the assessee.
manchanda that the order passed by the income tax officer under sec.
at the instance of the companymissioner of income tax west bengal 1 the tribunal referred the above mentioned question for the opinion of the high companyrt.
according to the tribunal the a.c.
the assessee companypany preferred an appeal to the appellate assistant companymissioner.
it did number dispute the assessability of the royalty 5 mentioned in clause 5 b of the agreement aforesaid.
was companyrect.
bhatnagar and ms.
both the departmental appeal and the assessees cross objections were heard together and decided by a companysolidated order of the tribunal.
a. subhashini for the appellant.
b the exclusive right to sell the licensed equipment in india under the wesman ruppnan such sale to be effected by the agency agreed upon c permit licensees to export the licensed equipment freely outside india except to companyntries where the licensors have similar license arrangements.
the judgement of the companyrt was delivered by kasliwal j. this appeal by grant of certificate under section 261 of the income tax act 1961 by high companyrt of calcutta rises the following question for companysideration whether on the facts and circumstances of the case in an appeal filed under section 248 of the income tax act 1961 the a.a.c.
in regard to the second issue the tribunal came to the conclusion that the amount brought to charge by the income tax officer was number exempt under the double taxation avoidance agreement between india and the federal republic of germany vide articles 3 1 and 16 of the agreement.
brief facts of the case are that the respondent assessee is a private limited companypany incorporated in india.
clause 5 of the agreement provided for payment to the licensees of the following sums a payment of 5 per cent towards the companyt of detailed working drawings in terms of clause 3 b .
the assessees cross objection was thus partly allowed.
c. manchanda k.p.
had juridiction to deal with the quantum of the sum chargeable under the provision of the said act from which the assessee was liable to deduct tax under section 195 thereof?
rao for the respondent.
