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Article 1: Objective and scope of work - The objective of the agreement is to perform a feasibility study for the Lohara West Mine i.e. a property of CICCO. The information from Indian sources will have to be incorporated in the economical part of the study. The entire study is to be conducted under the leadership of the CDF ie. assessee, however, the input of CICCO, or its local consultant, if any, is required for the local part.

Article 2: of the agreement states the procedure for collection data. The data will be provided by CICCO and these data will be scrutinized by CDF experts. Complementary information will be gathered either on site) during a visit made by CDF representatives or by mail. Upon completion of the data collection phase, CDF will carry out the geological studies and will design the general layout of the mine. After finalization of the basic design of the mine, CDF will carry out the complementary technical studies as per Article 1. CDF will complete and finalize the technical part of the feasibility study with incorporation of part carried out by CICCO. CDF will prepare and send the final report to CICCO.

6. The facts were not disputed before the Commissioner (Appeals). The issue before the Commissioner (Appeals) has been briefly stated vide Para 6 of his order and that is "whether the sum of Rs. 55.32 lakhs received by the French company as a consideration for the services of managerial, technical or consultancy nature fall within the meaning of 'fees for technical services' in Article 13(4) of the DTAA with France and if so whether it is taxable in India or not?"

7. It was contended before the Commissioner (Appeals) that the work for preparing and finalising the feasibility report was done by persons of Charbonnages De France International SA ('CDF' for short) in France. CDF persons visited the site in India for 2 to 3 days and even if it is considered that part of the work was done in India, it cannot be ignored that such work in India constituted an insignificant part of the total work done by the assessee and therefore it cannot be inferred from this that the work in relation to preparation and finalisation of the feasibility report was not actually done in France. The study consisted drawing by CDF of the general layout of the mine and based on this CDF was required to give the basic design and related documents for the operation of mine in India. The Indian company implemented the feasibility report received from CDF in India. It was Indian company that had approached CDF for the feasibility study report, perhaps for the reason that conducting of such study was not found feasible in India. Hence, the payment received by CDF in consideration of the services rendered outside India, i.e., in France, cannot be taxed here in India.