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23. On the other hand, ld. D.R while controverting the contention of ld. Counsel for the assessee took us through Article- 2 of the contract wherein scope of services by FEC is provided. On the strength of the contract he contended that the Toyo has rendered services for preparation of extended designs and drawings. M/s. Toyo was not engaged in actual construction of Refinery. It had only provided services for preparation of extended design drawings, based on basic designs and drawings provided by the assessee. Therefore, the contract exhibit the scope of work to M/s. Toyo is that of rendering services to the assessee and not that of supply of design and drawings. With regard to the decisions relied upon by the ld. Counsel for the assessee he submitted that in all these decisions the non-resident has supplied equipments along with their broader specification guiding the Indian Company for installing those equipments. The basic difference between those designs and the designs received by the assessee are that with the help of design supplied by the Toyo it has constructed the Refinery. Thus the Toyo has rendered services to the assessee and for making payment in lieu of those services assessee is bound to deduct the TDS.

24. We have duly considered the rival contentions and gone through the record carefully. The ld. CIT(A) while adjudicating this issue has taken cognizance of Article - 2 of the contract between assessee and M/s. Toyo Engineering, exhibiting the scope of FEC Works Services. We have also gone through the scope of work and services as postulated in Article - 2 of the contract. On perusal of the Article - 2 we find that the agreement are for rendering of services for preparation of extended designs and contracts. The terms of agreement provides that the services for preparation of extended design and drawings will be rendered outside India. From the documents and other terms of agreement it also appears that M/s. Toyo Engineering is not engaged in actual construction of Refinery. It has only provided services for preparation of extended designs and drawings based on basic designs and drawings provided by the assessee. Thus the different clauses of the agreement do indicate that the scope of work of Toyo Engineering is that of rendering services to the assessee and not that of supply of designs and drawings as propounded by the assessee. The ld. revenue authorities below have dealt with this issue in detail and ld. CIT(A) has rightly construed the scope of FECS work and services from the terms of the contract and rightly held that it amounts to rendering of services. The case of assessee dos not fall under the exclusion provided in Explanation - 2 to Section 9(1)(vii) of the Act, Apart from all these things as observed earlier an order passed under Section 201 r.w.s. 195 is a tentative order subject to regular assessment. The A.O has to see prima facie whether any element of income chargeable to tax under Section 4 is involved in the amounts paid to the non-resident. If that be so assessee, then deduct TDS before making the payment. Whether such receipts are actually taxable or not and to which extent element of income is involved in such payment is the issue which can be agitated in the regular assessment proceedings of the recipients. Therefore, prima facie basis ld. revenue authorities below have rightly arrived at a conclusion that element of income is involved in the remittance made to Toyo Engineering. As far as various decisions relied upon by ld. Counsel for the assessee are concerned we are of the view that it is not necessary to re-capitulate and re-cite all the decisions on this point. But suffice it to say that the core of all the decisions of the Hon'ble High Court or Tribunal is to the effect that if payment was made for purchase of some goods and along with that goods certain basic literature had come for explaining the functioning or assembling that item, then it should not be construed that some part of the payments required to be allocated towards services upon whom TDS deserves to be deducted. The facts of the assessee's case are quite different and therefore, assessee cannot draw any benefit from these decisions. In principle we do not find any merit in the contentions of ld. Counsel for the assessee. However, from the record it revealed that while making payment for the contracts relating to Phase-1 assessee has moved an application under Section 195 (2) of the Act. The ld. A.O has issued No Objection Certificate for making the remittance without deducting tax. The ld. D.R at the time of hearing pointed out that it is not an order passed under Section 195(2) of the Act, it is simply a No Objection Certificate authorizing the assessee to make the payment. It is for facilitating the assessee from rigors of RBI guidelines etc. However, we have gone through the application of the assessee available at page 195 of the paper book. It is an application moved under Section 195(2) of the Act. It is immaterial how the A.O processed this application and issued a No Objection Certificate for making the remittance without making TDS. Therefore, as far as for the payment made for Phase-1 the assessee cannot be treated in default under Section 201 of the Act because it has applied under Section 195(2) of the IT Act. before the A.O prior to remitting the payment. The ld. A.O shall re-compute the liability of the assessee and exclude all those amounts for which assessee has moved application under Section 195(2) of the Act and no No Objection Certificate was issued by the A.O. Hence ground No. 6 is partly allowed, whereas Ground No. 5 is rejected.