Law:

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Section 80-O of the Income-tax Act, 1961 - Deductions - Royalty, etc., from certain foreign enterprises - Assessment years 1992-93 to 1997-98 - Whether for claiming deduction under section 80-O, it cannot be said that assessee must provide 'technical services' even where it receives consideration for only providing commercial information - Held, yes FACTS The assessee having received commission income as buying agents of foreign enterprises, claimed deduction under section 80-O. The Assessing Officer, however, withdrew the deduction holding that the same was admissible only on rendering of technical or professional services. On appeal, the Commissioner (Appeals) holding that the assessee who provides technical or commercial or scientific knowledge or experience or skill is entitled to the benefit and that it is not necessary to provide technical services only allowed the assessee's claim. On appeal, the Tribunal also held that it was commercial information which the assessee provided to foreign buyers and in consideration thereof, it had received commission which was in convertible foreign exchange. On appeal : HELD The first part of section 80-O refers to the gross income of the assessee. It includes any income by way of royalties, commission and payment received by the assessee. The second part indicates the source, such as, from the Government of a foreign State or foreign enterprises. The third part has two sub-parts, one reads as - 'in consideration for the use outside India of any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available, or provided to such Government or enterprise by the assessee'. The second sub-part reads as - 'in consideration of technical (or professional) services rendered or agreed to be rendered outside India to such Government or enterprises by the assessee'. The fourth part is the mode of receipt, such as, income received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, etc. The fifth…

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