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" The company has demonstrated skills in the development, integration and management of complicated technologies across varying industries and terrain development of basic engineering designs, drawing up of detailed engineering plans, project construction, management services, sourcing through global procurement services and start up assistance at the time of handing over of the projects including training and technology transfer facilitation."

4. ABC provides services to its clients both on a turnkey basis and on specific assignment basis, the services provided being principally of the following nature :

(a) transfer of licensed technology ;

(b) basic engineering designs ;

(c) detailed engineering designs.;

(d) project and construction management services ;

(e) buying services ;

(f) start-up technical assistance ; and

(g) operational services.

5. Its negotiations with XY are "for providing complete project services on single point responsibility basis starting from technology transfer to the commissioning of the plant". However, it is stated, "it is possible that the final contract may exclude any one or more of the aforesaid services". ABC, for the purpose of providing these services, would be operating from its head office (HO) in France as well as a project head office (PHO) and a project site office (PSO) in India. It expects to employ about 200 to 400 employees in India and about 800 employees outside India.

15. At the outset, it must be pointed out that the wording of question No. 4 as posed by the applicant needs to be modified to bring out the real question at issue. The Authority is of the opinion that the question should read as follows :

" Whether the royalties and technical fees received by ABC under the contract in respect of its activities outside India are effectively connected with the permanent establishment in India ?"

16. As will be pointed out later, the contention of the applicant's counsel in regard to questions Nos. 7 and 8 is that they are so connected. All the outside activities are directed towards the installation of the manufacturing plant and industrial complex in India. Though carried out elsewhere, they are integrally connected with the project in India. The designs, basic engineering services and other services are based on information collected in India and the use of the process and technologies have to be adapted to the needs of, and prove workable in, Indian conditions. The permanent establishment in India has an undoubted voice over the outside activities as well and the royalties and fees in question cannot but be described as effectively connected with it. We, therefore, answer the question in the affirmative.