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2008] 305 ITR 105 [2008] 172 TAXMAN 236 (DELHI) HIGH COURT OF DELHI LI & Fung India (P.) Ltd.* v. Commissioner of Income-tax, New Delhi MADAN B. LOKUR AND V.B. GUPTA, JJ. IT APPEAL NO. 532 OF 2007 â-  APRIL 2, 2008 Section 80-O of the Income-tax Act, 1961 - Deductions - Royalty, etc., from certain foreign enterprises - Assessment year 1997-98 - Assessee-company claimed to have rendered technical services out of India as buying agent and, thus, claimed deduction under section 80-O - Assessing Officer disallowed claim on ground that it had merely rendered managerial services not of a technical nature - On appeal, Commissioner (Appeals) allowed said deduction holding that assessee's services were technical services - On revenue's appeal, Tribunal restricted claim of deduction under section 80-O to seventy per cent of fees received holding that thirty per cent of it was to be taken towards services rendered in India - Whether since contract obliged assessee to make available information and to render services to foreign client of nature outlined in section 80-O and Circular No. 700, dated 23-3-1995, and in consideration thereof, assessee received payment which was in convertible foreign exchange, it was to be given benefit of deduction available under section 80-O to extent of such consideration and Tribunal had erred, in law, in restricting claim of deduction to seventy per cent - Held, yes Circulars and Notifications : Circular No. 700, dated 23-3-1995 FACTS For the relevant assessment year, the assessee-company claimed deduction under section 80-O claiming to have rendered technical services out of India as buying agent. The Assessing Officer disallowed the claim on the ground that it had merely rendered managerial services not of a technical nature. On appeal, the Commissioner (Appeals) allowed the deduction claimed. On the revenue's appeal, the Tribunal held that 30 per cent of the fees received by it was to be taken towards services rendered in India and 70 per cent of fees received was to be taken as qualifying for deduction. The Tribunal, accordingly, directed the Assessing Officer to recompute the deduction. On appeal : HELD The services rendered…

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