T.V. Rajagopala Rao, Judicial Member - (1.) AS common questions are involved in all these appeals they can be taken up together and disposed of by a common order for the sake of convenience. Except ITA Nos. 834, 863, 866, and 870 which relate to assessment year 1980-81 the rest of the IT AS relate to assessment year 1979-80 for which the previous year ended by 31-3-1979.
(2.) The assessees herein are foreign technicians belonging to three countries, viz., Italy, West Germany and Czechoslovakia. Bharat Heavy Electricals Ltd. (for short BHEL), Hyderabad, which is a Government of India undertaking had entered into agreements with M/s. Siemens, West Germany on 21-6-1974. So also the said company entered into collaboration agreement with M/s. Nuovo Pignone of Italy for manufacture of high pressure compressors on 29-1-1971. So also BHEL entered into an agreement with M/s. Techno Exports, Prague, Czechoslovakia on 22-4-1965. Agreements entered into with the abovesaid three foreign countries were provided to us in paper compilation filed before us. It is an admitted case that the agreements entered into with the above-said three foreign collaborators were approved by the Government of India prior to 1-4-1976. It is also an admitted case that our country entered into Double Taxation Avoidance Agreements with West Germany, Czechoslovakia and Itlay and no such agreement was as yet entered into with Czechoslovakia, At Article 4.1 of the agreement entered with M/s. Siemens of West Germany (for short W.G. company) it had undertaken to train BHEL-personnel at BHEL's plants and to provide general technical assistance by active participation in designing in the initial stages and establishing production, quality control and testing at BHEL's plant and erection and commissioning' of Industrial Turbines at erection sites. At 4.2 of the agreement with W.G. company the delegation of the personnel to India shall be on terms and conditions to be mutually agreed upon.
(3.) THE salient features of the agreement entered into with M/s. Nuovo Pignone of Italy (for short Italian Co.) as far as they are relevant for our purpose are as under : 3.1.6 : Upon written request by BHEL, PIGNONE is prepared to send its experts to BHEL's office and plants where the product are designed and manufactured to assist in the designing in the initial stages and establishing production and commissioning of products. THE conditions for the sending of these personnel to India shall be on terms included in Annexure-6. Firstly, the BHEL should pay the Italian company the following rates for each calendar day of absence from normal place of work in Italy of each of the personnel deputed by PIGNONE to India : JUDGEMENT_5168_TLIT0_19870.htm BHEL should provide a free-furnished accommodation at site for the experts and their families, if any. If the Italian delegated experts is/are taken ill full salary should be paid for all the time of sickness not exceeding 45 days. If the Italian company's personnel have to stay longer than one year they shall be entitled to yearly vacation of 30 days. BHEL should provide transport free of charge to Italian company's personnel on official work. THE Italian company's personnel has to work 40 hours per week comprising of 6 working days. For overtime work, if any, on Sundays and holidays the rates shall be mutually agreed upon. THE Lira portion of the daily rate shall be paid by BHEL within 30 days of presentation of the monthly invoices by the Italian company. THE rupee portion of daily rates shall be paid by BHEL in advance to the technical personnel deputed by Italian compa.ny at the beginning of the month on the basis of estimated amount due for the month. THE Italian company shall submit at the end of every month bill the actual amounts due for the services of its personnel every month and adjustments will be made against the advance. BHEL shall render all possible assistance in obtaining the appropriate exemption from any Indian tax which may be levied on the personnel of the Italian company stationed at site in India in connection with the agreement. In case such exemption from payment of tax is asked for by the personnel of the Italian company and is not granted by the Government of India under the provisions of the Income-tax Act all taxes shall be to the account of BHEL.;