Income Tax Appellate Tribunal - Madras
Nisshinbo Industries Inc. vs Assistant Commissioner Of Income Tax on 2 February, 2001
Equivalent citations: [2002]83ITD748(CHENNAI), (2003)78TTJ(CHENNAI)554
ORDER
A. Kalyanasundharam, Senior Vice President
1. The assessee, a non-resident company, incorporated in Japan, has filed this appeal aggrieved by the order of the Commissioner of Income-tax (Appeals)-II, Chennai [CIT(A) for short]. The grievance of the appellant-company is that CIT(A) in his order dt. 29th July, 1992, had held that the lump sum amount received by it from the Indian company M/s Rane Brake Linings Ltd. (RBL for short) is royalty by enhancing the assessment framed by the Assessing Officer, [AO for short]. AO, while framing the assessment under the IT Act, 1961, (hereinafter referred to as the Act), had held that two-third was royalty and one-third was fee for technical services. The plea of the assessee in the present appeal is that the amount received is fees for technical services.
2. The issue as raised in appeal is one of interpretation of the collaboration agreement. The manner in which the lower authorities had interpreted the said agreement and the appreciation of the facts as it emerges from the orders of the lower authorities for easy comprehension of the issues is brought out in the following paragraphs.
3. AO had perused the collaboration agreement that the assessee entered into with RBL for supply of technical know-how for establishing an unit for manufacture of disc pads and brake linings. He observed that the appellant-company had derived income by way of fees for supplying technical know-how of Rs. 2,02,237. The assessee had returned this income as fees for technical services and paid tax at the rate of twenty per cent and that the assessment was framed initially by accepting this returned income. AO felt that because questions were raised as regards applicability of rate of tax in certain cases before the Tribunal by splitting the technical know-how fees between royalty and fees for technical services, he issued a notice calling for rectification of the order as was passed initially for application of rate of forty per cent treating the income as royalty. The appellant-company objected to the rectification by pointing out that the correctness of the decision of the Tribunal is a debatable issue and that the splitting of technical know-how fees, between royalty and fees for technical services would depend on the agreement between parties.
AO accordingly issued a notice under Section 148 of the Act to which the appellant-company replied stating that no part of the income has escaped assessment enclosing the photocopy of the return of income as filed by it. AO had observed that reopening of an assessment is permissible even where the rate of tax was applied at a lower rate. To this notice the assessee filed its return of income at nil along with a covering letter submitting that because the technical know-how fees is exempt in the light of the Double Taxation Avoidance Agreement [DTAA for short] between India and Japan, it is entitled to refund of the entire tax that it had paid earlier and filed a form for refund of tax by pointing out that at the time of original assessment the DTAA was not considered.
AO in the reassessment proceeding considered the provisions of DTAA especially to Clause 5 and observed that it related to industrial and commercial profits excluding dividends, interest, rent, royalties or similar payments as referred to in Article X(e) and capital gains, remuneration, fee for technical services [Article X(k)]. AO referring to Article X(k) observed that fees for technical services was includible under the head 'Other sources' within the Contracting State in which services are rendered. He observed that Articles III and X when read together it gave an impression that fees for technical services are assessable in the country where such services are rendered.
He referred to the assessment as was framed for the assessment year where the entire amount of Rs. 1,99,880 was held to be of the nature of royalty and a tax rate of forty per cent was applied. On appeal the first appellate authority had issued a direction to examine whether any part was liable for taxation at a higher rate by referring to a case that was decided by the Tribunal. AO had noted that the assessment as was finally made indicated that two-third of Rs. 1,99,880 was royalty and one-third was fees for technical services and the rate of tax of 40 per cent and 20 per cent, respectively, were applied. This was challenged in appeal to the first appellate authority where the appellant-company raised an additional ground of appeal claiming that DTAA is applicable and that the entire income is free from tax. The first appellate authority restored the issue back to AO for consideration of DTAA. AO once again passed the assessment order retaining his earlier order of treating two-third as royalty and one-third as fee for technical services.
AO felt that the assessment as framed for the asst. yr. 1986-87 was reasonable and followed it for the present assessment year too. He accordingly split the amount of Rs. 2,02,237 between royalty and fees for technical services at two-third and one-third and applied the rate of 40 per cent and 20 per cent, respectively.
4. The appellant-company felt that its claim was not appreciated properly and sought the intervention of CIT(A) by filing its appeal before him. CIT(A) perused the collaboration agreement and noted that the assessee was to supply technical know-how for manufacture of disc pads also called frictional material parts used in automobiles for a consideration of 12 million yen that was payable in three instalments. One-third of the consideration converted into Indian rupees was 2,02,237 was received by the assessee in the previous year relevant to the assessment year under appeal. He had noted the submission of the appellant-company that services in connection with the supply of technical know-how was rendered out of India and hence no part of the consideration received attracted any tax. The assessee alternatively submitted that it could be treated as fees for technical services attracting a rate of twenty per cent as tax. Assessee also insisted that DTAA was applicable to the collaboration agreement and thereby no part attracted any tax in India because the delivery of the documents covering the technical know-how was taken by RBL in Japan.
Assessee elaborated its pleas by referring to the various parts of the collaboration agreement and submitted that according to the agreement the assessee was to provide technical know-how for establishing the unit for manufacture of disc pads and brake linings that is so contained in Clause 4 of the said agreement. It was pointed out that Clause 6 indicated for provision of services of advisory staff for providing advice and guidance for installation of plant and that Clause 7 indicated training to employees of RBL at Japan. Reference was also made to Clause 17 of the agreement that contained the payment schedule for the supply of technical know-how indicating that one-third was payable on agreement being taken on record, one-third on delivery of documents and balance of one-third on commencement of commercial production or four years from the date of agreement. It was also pointed out that the Clause 17 also contained payment of royalty at 5 per cent of the sale value for a period of five years from the time of commencement of production. Referring to Article X(k) of DTAA it was pointed out that the technical know-how document was delivered in Japan indicating that no part of any service was rendered in India and hence the whole' amount of consideration for parting with technical know-how was not liable to tax. It was further pointed out that the case decided by the Tribunal there is no finding as such because the case was remanded back to the file of AO for fresh examination.
5. CIT(A) examined every claim made by the appellant-company including appreciation of the various terms contained in DTAA like 'territory'. He also referred to the collaboration agreement that indicated that the assessee is in a position to provide technical services concerning design and manufacture of disc pads and brake linings and that the Indian company had expressed its desire to acquire access to such information and use of technical services. He noted that Clause 1of the agreement defined 'territory' as India. He noted that Clauses 3.1 and 3.1.1 permitted exclusive right of use of technical know-how and its technical documentation. He also noted that the assessee was to allow the services of two of its advisors for guidance. He noted that Clause 10 of the agreement clearly provided that the payment is specifically and unambiguously for the license granted, know-how supplied and services to be rendered in the territory of India. He reproduced the sanction accorded by the Reserve Bank of India [RBI for short] to the agreement. He referred to Clause 10.1(D) of the agreement and observed that it talked of commercial output. He, therefore, concluded that the assessment needed enhancement and hence issued his notice of enhancement.
Assessee made its submission to this notice of enhancement by reiterating its submissions as above. CIT(A) was of the opinion that the payment was covered by the provisions of Section 9(1)(vi) of the Act and Expln. 2 attached to it and treating the payment as on account of royalty was proper. He also was of the opinion that Article X(k) of DTAA provided for including the fees for technical services under the head 'Other sources' for services in India and Article X(e) also stated likewise. He concluded that the whole of the amount was taxable as royalty and drew support from the order of Tribunal in Nodit Ltd. v. Dy. CIT (1992) 42 ITD 187 (Mad).
6. The appellant-company aggrieved thus had preferred its appeal before us and in its ground of appeal had pleaded that the amount received could be treated as fees for technical services on which rate of 20 per cent only is applicable. The learned counsel for the appellant-company filed a copy of collaboration agreement along with the approval accorded by RBI. He submitted that the entire technical know-how as specified in the collaboration agreement was carried out in Japan with RBL taking delivery also in Japan that showed that no part of the technical know-how was done in India, He pleaded that the appellant-company could have sought for admission of an additional ground of appeal that the entire amount was free from any tax liability in India because the supply of technical know-how to RBL did not involve any work in India including its delivery that was also made in Japan, He, however, submitted that his emphasis before us would be limited to seeking of restoration to its original state of return of income as filed by it in which it had treated the amount as in the nature of fees for technical services that was taxed at 20 per cent .
He drew our attention to the clause that specified for payment schedule and submitted that the agreement provided for payment of royalty based on commercial production at 5 per cent of the sale value. He pointed out that the royalty is based in actual production and sale and the present situation is much earlier to it and is based on the agreement being taken on record in India. He submitted that at this stage the agreement did not require any service to be rendered in India and the exchange of the technical know-how documentation was also carried out in Japan. He submitted that the present circumstance was pre-production stage and hence it could not be termed as towards royalty. He pleaded that all collaboration agreement would contain clauses for rendering of advisory services, training of personnel of India company but none of these clauses are relevant at this stage that followed immediately to the signing of the agreement.
He pleaded that 'territory' as contained in the agreement is for the reference of the location of the licensee namely, RBL in India who is to use the technical know-how. He referred to DTAA and submitted that it contains broad provisions covering business connection, establishment in the Contracting State, the various kinds of income like rent, dividend, business or profession, royalty and so on and not all these provisions may be attracted in every case of agreement and activity between parties in India and Japan. He submitted that various clauses are invariably inserted because it involved transfer of technical know-how for installation of plant followed by manufacture of disc pads and brake linings on the design supplied by the assessee. These are safety clauses that are necessary in the interest of both the parties and invariably are carefully examined by the Government of India before according its sanction. He submitted that because DTAA. overrides the provisions of the Act, even the fees for technical services was not liable to be taxed in India. He relied on certain case law that opined that DTAA overrides the provisions of the Act wherever it is attracted. He placed reliance on the decision of the Karnataka High Court in Citizen Watch Company Ltd. v. IAC (1984) 148 1TR 774 (Kar), the Calcutta High Court [sic--Calcutta Bench of Tribunal] in Graphite Vicarb India Ltd. v. ITO (1993) 199 ITR 11 (Cal)(SB)(AT) and the decision of the Tribunal in TVS Suzuki Ltd. v. ITO (2000) 69 TTJ (Mad) 51 : (2000) 73 ITD 91 (Mad).
7. Departmental Representative Mr. Suryanarayana dealt with exhaustively the various, issues as examined by the authorities below along with the various clauses of the collaboration agreement. He also referred to the various articles of DTAA. He submitted that in view of applicability of the provisions of Sections 9(1)(vi) and 9(1)(vii) of the Act to the facts of the case the CIT(A) was justified in concluding the entire amount received is royalty. He further contended that the clauses of the agreement has to be read in sequence and on that basis it is conclusively established that the assessee had carried out its activity in India. Because the activity was carried out in India, DTAA is inapplicable to the facts of the case. He pleaded that the issue is similar to the one examined by the Madras Bench of the Tribunal in Nodit Ltd. (supra).
8. In his reply the counsel for the appellant Mr. Vijayaraghavan contended that the decision of the Tribunal as relied upon by the Departmental Representative may not be applicable because the applicability of DTAA was not raised as was done during the hearing of this appeal. He pleaded that no case law could be imported into another case ignoring the facts of the case. He insisted that DTAA overrides the provisions of the Act and considering the fact that the entire operation of the agreement was carried out in Japan, the receipt was not taxable.
9. We have given our very careful considerations to the rival contentions and perused the collaboration agreement and the provisions of Section 9(1)(vi) and 9(1)(vii) and Section 115A of the Act and DTAA. We have also examined the case law relied upon by the parties.
The issue in the appeal concerns with the appreciation of the collaboration agreement that the assessee entered into with the Indian company RBL by which it had agreed to part with the technical know-how for the manufacture of disc pads and brake linings. The examination of the said agreement is for the determination of the character of the amount receivable in exchange. It is necessary to maintain here that the counsel for the appellant company had stated that though the appellant could have sought for the exemption of the income under the Act by raising an additional ground of appeal, he is only insisting for the receipt to be treated as in the nature of fees for technical services which was the foundation of returning the income at the initial stage and assessment completed on that basis. The submissions of the counsel for the appellant that receipt could be exempted from tax that was dealt with in the earlier paragraphs, Because the issue revolves around the collaboration agreement, the various clauses as are touched upon are brought down hereunder. The provisions of Section 9(1)(vi) and 9(1)(vii) that are applied by the Department are also brought after the clauses of the agreement. The Articles X(e) and X(k) of DTAA are also reproduced.
Preamble of the agreement dt. 26th Sept., 1984, reads :
"A. Licensor is a leading manufacturer and supplier of disc pads, brake lining and clutch facings to original equipment manufacturers in Japan and elsewhere and has, and may in the future acquire, valuable information concerning industrial experience in the manufacture of brake linings.
B. Licensor is in a position to provide technical service regarding the design and manufacture of disc pads and brake linings.
C, Licensee is desirous of acquiring access to said information and use of technical services offered by the licensor."
The other clauses are:
"1. (i) The following expressions shall bear the meanings set against them:
The products :
Such formalities of licensor taken up for commercial manufacture by licensee The know-how :
The information in any form, (including drawings) formulation, knowledge and experience of licensor 'at the date hereof concerning the manufacture and design of the products and any improvements passed on by licensor to licensee under this agreement other than acquired improvements.
3.1 In consideration of the payments hereinafter reserved and of the observance and performance by licensee of the undertakings and obligations hereinafter contained and on its part to be observed and performed licensor hereby grants to licensee and for the duration of this agreement:
3.1.1. The exclusive right to use the know-how for the manufacture of the products in the territory;
3.2.1. Licensor shall design for licensee the products and shall provide technical documentation comprising details of formulations, design drawings and initial tooling design drawings. It shall be licensor's responsibility to provide the know-how as per Clause 4.
4.1. The know-how to be provided by the licensor under this agreement embodies in technical documentation as follows:
4.1.1. Product formulations and specifications of raw materials as may be decided to enable licensee to produce the product in licensee's plant and assistance in testing the key raw materials developed by licensee.
4.1.2. Details of production process to be adopted for licensee's production requirements.
4.1.3. Assistance in selection of correct machineries, testing equipments, toolings, moulds, etc., for use in manufacturing the product.
4.1.4. Technical documentation relating to methods and skill to quality control in manufacturing/testing the products.
4.1.5. Technical documentation relating to the specification of finished products and details of method of testing/evaluation (test code) and assistance for testing finished products.
6.1. Licensor shall provide at reasonable notice from licensee an agreed number of experienced staff not exceeding two (2) at any one time at licensee's plant for an agreed period to give advice and guidance on the layout and installation of machinery in licensee's plant and also to perform such other functions as covered in this agreement. In respect of the above visits of staff of licensor, licensee shall pay the cost of all air and other travel tickets, all travel to be full fare business class, and accommodation (including meals) in first class hotels.
7.1. Subject to the following sub-clauses, licensor shall give practical training to licensee's nominated employees in licensor's factories in Japan in licensor's methods of production, quality control, testing and inspection of the products.
9.1. Licensee shall not use on the products any trade marks, trade names of licensor except during the term of this agreement, use the wording 'License NBK, Japan' in its literature and packaging of the products.
10.1. For the license granted, know-how supplied and services to be rendered by licensor, licensee shall make the following payments subject to deduction of income-tax to licensor:
A. A sum of 40,00,000 Yens to be paid within sixty (60) days of the effective date:
B. A sum of 40,00,000 Yens to be paid within sixty (60) days of delivery, of documents listed under Clause 4;
C. A sum of 40,00,000 Yens to be paid on the commencement of commercial production of the products or four (4) years after effective date whichever is earlier;
D. A royalty of 5 per cent of the selling price of the products sold by licensee. Such royalty to be paid for a period of five (5) years from the commencement of manufacture of each product subject to Clause 2.2. This royalty will be restricted to licensed/registered capacity plus 25 per cent in excess thereof.
E. In this sub-clause commencement of manufacture shall mean commencement of commercial sales of the relevant products.
10.4. In each calendar year the royalty referred to Sub-clause 1(D) shall be calculated by reference to sales in the periods from the first day of January to thirty-first day of March, from first day of April to thirtieth day of June, from first day of July to thirtieth day of September and from the first day of October to thirty-first day of December and shall be due for payment in respect of such periods not later than the thirtieth day of April, thirty-first day of July, thirty-first day of October and thirty-first day of January, respectively.
14.1. In the event that this agreement expires by effluxion of time, or is lawfully terminated by licensee:
(i) Licensee may continue to use the know-how free of charges,
(ii) Licensee shall cease to use the wording referred to in Clause 9.1."
Salient provisions of Sections 9(1)(vi) and 9(1)(vii) of the Act Section 9--Income deemed to accrue or arise in India--(1) The following incomes shall be deemed to accrue or arise in India-
(vi) income by way of royalty payable by--(b) a person who is resident, except where the royalty is payable in respect of any right, property or information used or services utilized for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; Explanation 2 : For the purposes of this clause, 'royalty' means consideration (including any lump sum consideration) but excluding any consideration which would be the income of the recipient chargeable under the head 'Capital gains' for-
(iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill.
(vii) income by way of fees for technical services payable by-
(b) a person who is resident, except where the fees are payable in respect of services utilized for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India;
Explanation 2 : For the purposes of this clause, 'fees for technical services' means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head 'Salaries'.
Article X of DTAA
(e) Royalties and similar payments paid as consideration for the use of, or for the right to use, in one of the Contracting States, any copyrights artistic or scientific work or equipments, patents, designs, secret processes and formula, trade marks, cinematographic films (including films for use in connection with television) and other like properties and fee for technical services rendered in that connection, shall be treated as income from sources within that Contracting State.
(k) Fees for technical services payable to an enterprise shall be treated as income from sources within the Contracting State in which are rendered the services for which such fees are paid.
The preamble gives a brief description of the capability of the assessee in the . field of manufacture of disc pads and brake linings and its special Knowledge of industrial designing in relation to the products and it being in a position to provide technical service concerning the design and manufacture of disc pads and brake linings. On the other hand, the agreement indicated that the Indian company is desirous of acquiring access of information for the manufacture of disc pads and brake linings and the technical services that the assessee is in a position to offer in connection with the manufacture. The agreement suggest that the manufacture of disc pads and brake linings require setting up of the plant specifically to suit its manufacture and the second, the manufacture of the products itself. In regard to the first part the appellant-company has offered that it would guide the Indian company in the design and set up of the plant followed by the selection, development, design and testing of raw materials. The appellant-company in the previous year relevant to the assessment year under appeal has undisputedly provided the entire documentation, design drawings for set up of the plant and for the manufacture of the products to the Indian company in Japan. It is also accepted that in the year under appeal other than handing over of the documentation, etc., to the Indian company, the appellant-company had not done anything else as far as the Indian company is concerned.
Section 9(1)(vi) of the Act that touches upon the concept of royalty paid by a resident has so stated negatively, i.e., excluding the amount payable in respect of right, property or information used for the purposes of business out of India, would be deemed as accrued or arises in India, Rephrasing the said definition for easy appreciation, 'royalty payable by a resident in respect of right, property or information used or services utilized for purposes of business carried on in India or for earning income in India, would be deemed to accrue or arise in India'. The reading of the section makes it clear that the amount of royalty payable is related to two basic conditions, namely, "used or services utilised." The Explanation touches upon imparting of any information that may be technical, industrial, etc., for which resident in India is payable any lump sum consideration. Likewise rephrasing of Section 9(1)(vii) positively illustrates that the fee for technical services payable in respect of services utilised in a business carried on in India, etc., and the Explanation further illustrates to include lump sum consideration for rendering of managerial, technical or consultancy services.
To our mind both the above sections cover situation that involves use of information in the business or utilization of the services for the business and the condition that is to be fulfilled is that the business must be in India. There could be agreements that permit the resident the use of patent, trade mark, formula, other information and the resident in India could start using the information from the date of approval of the agreement, In such a situation the lump sum paid as consideration for parting with information that allows the resident to use it immediately in his business and earn income, could be royalty because, it is directly relatable to usage of the information. Likewise, there could be agreements permitting resident the benefit of technical services like managerial or consultancy soon after the approval of the agreement, the lump sum consideration could be fee for technical services that are utilised. Such kind of agreements and the agreement that contain a part covering establishing of an unit of manufacture and the other part covering actual manufacture could not be placed in the same compartment. This is because, the former, the conditions 'used or services utilised' are fulfilled immediately while in the latter, the use and utilization of services connected therewith follows the setting up of the unit.
However, there could be residents whose business may be setting up of plants in India in collaboration with a foreign company and may enter into an agreement of acquiring the know-how for set up of plants and in such a situation because, the business of the person is setting up of an unit, he could be held to have used the know-how on acquisition. Similarly a resident who is in the business of rendering of technical services and has a collaboration with a non-resident company for similar services, it could be said that the Indian company had utilised the services of the non-resident company immediately on signing of the agreement. To put it in other words, a resident who is in a position to use the technical know-how and utilise the technical services in his business from the time of approval of the agreement, the amount payable by him, by whatever name called, could be brought under the umbrella of royalty or fees for technical services. The reason is obvious and that is the non-resident company is deriving benefit from activity in India through the resident or is earning income through the resident in India.
In the present case too the appellant-company is deriving or earning income from resident in India by parting with the technical know-how for a lump sum consideration but the only difference is that the resident Indian is not in the same line of the business as the appellant-company, i.e., owning or having developed information that it is in a position to impart or share with another for a consideration that could be used for manufacture of disc pads and brake linings. The Indian company is in the business of manufacture of brake linings as is indicative from its name. The appellant-company is carrying on manufacture of disc pads and brake linings for various original equipment manufacturers and has developed its own industrial knowledge that it is in a position to part with for a consideration. If the agreement results in the manufacturer of the products in the plant of the resident company straightaway, the conclusion has to be that the lump sum consideration covers both royalty and fee for technical services. This is based on the feature of business of the appellant and the resident in India, which is manufacturer of disc pads and brake linings.
However, as is brought out earlier, the agreement indicates that the appellant-company is to supply to the resident Indian company design drawings for set up of the plant followed by the manufacture of the product in that plant. The resident company apparently does not possess wherewithal similar to the assessee excepting that it is in the business of manufacture of disc pads and brake linings. To put it in other words, the business of the resident company is only to manufacture disc pads and brake linings and does not possess the traits of a developer of industrial know-how that it could exchange for a consideration. The business of the resident company apparently limited to manufacture with the aid of information supplied by the assessee and that too only after setting up of the plant designed for the manufacture, the resident could not be said to have used the technical know-how for manufacture. The term 'used' implies acquisition or hiring in place of acquisition followed by it being put to use. Using the know-how in setting up of the plant in India could also be held as accrued or arose in India if the exchange is done in India. However, as is evident from the records of the authorities below, the exchange of the documents took place in Japan.
Further, considering the fact as had been noted by AO the second instalment as agreed to was made in the following assessment year, it is indicative of the situation that the Indian company is required to set up an unit for the manufacture of the disc pads and brake linings. It is not the case of the Department that soon after the agreement, the appellant had started using the know-how for manufacturing the disc pads and brake linings which perhaps might be an indication that the Indian company only acquired the know-how for manufacture, and the lump sum is only a preliminary payment. In the circumstances of the case, the lump sum does not appear to be a payment of either royalty or fees for technical services. However, as the appellant's grouse had been that the amount received by it could be only fees for technical services as is evident from the grounds of appeal raised before us, we are inclined to grant this prayer to the assessee and hold that the amount received may be taxed as fees for technical services by applying a flat rate of twenty per cent In Nodit Ltd. (supra), Tribunal was considering the technical aid agreement that stated "for a period of five years from 1st Jan., 1981, DIL shall provide comprehensive research and development support service, including but not confided to engineering service, production service, quality control and equipment selection, for Rane and all future developments in the manufacture and use of friction materials originated by the DIL research and development division shall be available to Rane at their request. Further, Rane shall have the option to extend the Technical Aid Agreement for a future period of five years on the same terms subject to the approval of Government of India." In that case the payment was use and hence it was royalty. The facts and circumstance as in Nodit Ltd.'s case are not the same as of the appellant and hence, the said decision is inapplicable.
The appellant had touched upon the provisions of DTAA and according to Article X(k) the fees for technical services is to be taxed in the Contracting State and in the instant case, it would be India. We are, therefore, of the opinion that Rs. 2,02,237 is taxable in India as fees for technical services and we hold accordingly. The issue, therefore, is decided in favour of the appellant-company and against the Revenue.