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2. The brief facts giving rise to the 2nd appeal are that the assessee is a nonresident company incorporated in Czechoslavakia being represented by M/s Rashtriya Ispat Nigam Ltd. (hereinafter will be known as RINL) in its capacity as a representative assessee. The assessee-company had executed three contractual agreements with RINL for manufacture and delivery outside India of their equipments for medium merchant and structural mill of Visakhapatnam Steel Project, for supply of design & engineering services abroad, for technical assistance through supervision of erection, commissioning and performance guarantee tests, and for the overall responsibility in connection with the medium merchant and structural mill of the above project, the first two agreements were entered into on 20th July, 1987, and the third agreement was entered into on 31st Aug., 1987. The total contract price for the supply of design and engineering charges outside India was non convertible Indian Rs. 16,28,20,000 and the consideration for supervision of erection, commissioning, performance guarantee tests of the mill was NCI Rs. 7,51,26,800. As per the terms and conditions of the contract agreement executed between the two parties that 10 per cent of the contract price would have to be paid in advance towards down payment and another 10 per cent would have to be paid within 12 months from the date of the letter of acceptance and the balance 80 per cent working out to Rs. 13,02,56,000 to be paid in 5 annual successive instalments. The instalment scheme involved an interest rate at 4.5 per cent p.a. with each instalment.

3. In this assessment year under consideration i.e., asst. yr. 1992-93, RINL filed a return on behalf of the assessee-company on 26th Dec., 1992, declaring 'Nil' taxable income. During the relevant provions year, the appellant had received a sum of Rs. 5,67,94,174. This consisted of two receipts of Rs. 3,19,12,720 remitted on 25th June, 1991 and Rs. 2,48,81,454 remitted on 6th March, 1992. The first sum is part of Rs. 13,02,56,000 (80 per cent of D&E) which had already been subjected to tax by the assessing authority for the asst. yr. 1991-92 on accrual basis. The second item of Rs. 2,48,81,454 represented SDR variation on the principal and interest relating to the first instalment of D&E charges, In the above circumstances the appellant claimed the entire, sum is not liable to tax in the asst. yr. 1992-93.

The present appeal by the assessee is against the order of the CIT(A), confirming the assessment of the aforesaid sum of Rs. 2,03,11,400.

4. As per the vociferous argument made by the learned senior counsel of the assessee-company represented through RINL and as per their written submission filed before us, the following factual aspect as well as legal aspect emerge from out of the same.

(i) The income assessed to, represents the variation on account of the difference in the rate of rupee as per International Monetary Fund adopting the base date as 22nd Oct., 1986. Therefore, according to the assessee-company, it does not constitute income liable to tax.

3. The CIT(A) erred in deleting interest charged under Section 234B which is contrary to law.

4. Any other ground(s) that may be urged at the time of hearing,"

2. While arguing on behalf of the Revenue, the learned Departmental Representative vehemently argued that late payment of advance tax leads to charging interest under Section 234B. A foreign company is bound to pay advance tax and file the return while earning in India. They cannot escape from their statutory liability of paying advance tax and filing return on the plea of foreign company. In this connection, the learned Departmental Representative heavily relied on the decision of the Authority for Advance Rulings in the case of Steffen, Robertson & Steffen Consulting Engineers & Scientists v. CIT (1998) 230 ITR 206 (AAR). In this case, the Authority for Advance Rulings has held that in a case where there was a colloboration agreement, between the foreign company and Indian company, the agreement stipulating that foreign company would not be liable to pay any taxes in India and that Indian company is liable to pay tax which may have to be paid by foreign company. The foreign company is bound to file returns and pay advance tax. It has been further held that determination of question whether income accrued or arose to it in India would affect it and foreign company is entitled to file application for advance ruling as per the provisions of Sections 245N and 245Q. In reply "to the argument advanced by the learned Departmental Representative, the learned counsel on behalf of the assessee submitted that for the relevant assessment year under consideration i.e., asst. yr. 1992-93, the assessee-company filed a return on 25th Dec., 1992, through RINL in their representative capacity. The assessee declared Nil taxable income on the ground that although they had received some amount from RINL, the entire amount was exempted under IT Act. The assessee's claim was based on the NOG dt. 26th Nov., 1991, issued consequent to the order of the CIT(A) in the assessee's case in ITA No. 77/DC/SR/BSP/91-92 dt. 20th Nov., 1991. The said order of the assessee relating to asst. yr. 1992-93 in respect of an order under Section 195(2) of the IT Act. Filing detailed written submission with regard to the payment clause and payments made by the RINL to the assessee-company towards the remittances made to them in earlier years, the learned counsel submitted that for all those remittances made by RINL, NOC has been obtained from the IT Department. Therefore, nothing was hidden and all the transactions were known to the Revenue. After completion of the assessment for the asst. yr. 1992-93 on 31st March, 1995, the assessing authorities subject to tax the amount of Rs. 2,03,11,400 being the SDR payment on delayed payment of the principal amount payable as consideration under the contract and levied tax thereon at the rate of 30 per cent. In addition, the assessing authority levied interest under Section 234B amounting to Rs. 43,87,248. The assessee preferred appeals against the said order and the C!T(A) although confirmed the assessment, at the sametime allowed the appeal in respect of the levy of interest. The learned authorised representative further submitted that the appeal preferred by the Revenue on the ground of allowing the interest under Section 234B in favour of the assessee by the CIT(A) does not stand on a sound footing in view of the catena of decisions in favour of the assessee. In this connection, he invited our attention to the following decisions which are analysed below.