Case: RAMNATH AND CO Vs. THE COMMISSIONER OF INCOME TAX

which were rendered from India. Therefore, the findings of the Appellate Authority and ITAT, being based on irrelevant considerations while ignoring the relevant aspects, were neither of binding nature nor could have been decisive of the matter. Hence, neither anything turns upon the submissions made on behalf of the appellant with reference to the decision in K. Ravindranathan Nair (supra) nor this aspect requires any further discussion. 37. In our view, the High Court has rightly analysed the entire matter with reference to the relevant questions and has rightly proceeded on the law applicable to the case. The impugned judgment calls for no interference. The appellant M/s Laxmi Agencies - the appeal arising out of SLP (Civil) No.23699 of 2016 . 38. This appeal involves similar claim of the other assessee firm M/s Laxmi Agencies, said to be engaged in similar business of rendering services to foreign buyers of Indian marine products. For the assessment year 1997-98, this assessee firm, while declaring total income of Rs. 31,81,180/-, claimed deduction under Section 80-O to the tune of Rs.21,84,302/-, being 50% of the net income of Rs. 43,68,604/- towards the service charges received from such foreign buyers. 38.1. In the assessment order dated 31.01.2000, the AO noted the explanation of this appellant regarding the services rendered in the following: …..As per the detailed letter dated 22.11.1999 filed by the assessee the services rendered by it to the foreign enterprises are by way of : 1. To impact commercial and technical knowledge, experience and skill in the field of Frozen Food/Marine products to enable them to formulate their policies and take decision for import thereof from India; 2. To locate reliable sources of quality and assured supply of Frozen Seafood/Marine products and communicate the assessees expert opinion and advise to them to enable them to take decisions for import from India; 3. To keep close liaison with agencies such as EIA/Llyods/ SGS especially for organoleptic/bacteriological analysis and communicate the results of inspection along with assessees expert comments and advice. This also enables the foreign enterprises to take decisions for import from various sources from several countries available to them. 4. Making available full and detailed analysis of the seafood situation and prices for the above purpose. 5. To advise and keep informed the foreign buyers of the latest trends/process applications in manufacturing and all valuable commercial and economic information which will directly and indirectly assist them to organize, develop, control on regulate their import business from India. 6. To assist foreign buyers in negotiating and finalizing prices for Indian marine products and advise them of all rules and regulations and other related information for such import. In the case of this appellant, again, the AO was of the view that the services were rendered in India and the service charges received from the foreign enterprises in respect of such services did not qualify for deduction under Section 80-O. 38.2. In the case of this appellant, the Appellate Authority examined the terms of agreements with the foreign enterprises in detail and noted the contents thereof in the following paragraphs:- 2.The appellant had entered into agreement with various foreign enterprises for render the following services. Article 2 of the agreement entered into with Neptune Fisheries Ind. USA reads as under:- (a) Locating reliable source of quality and assured supply of frozen sea-foods/marine products for the purpose of import by NEPTUNE and communicate its expert opinion and advice to the NEPTUNE; (b) In addition to the above services rendered by Laxmi it will also keep a close liason with agencies such as ELA/LLOYDS/SGS especially for organolotic/acteriological analysis and communicate the result of the inspection along with its expert comments and advice. (c) Making available full and detailed analysis of the sea food supply situation and prices; (d) To advise NEPTUNE and keep them informed of the latest trends/processes applications in manufacturing and of all valuable commercial and economic information about the markets, Government Policies, exchange fluctuations, banking laws which will directly or indirectly assist NEPTUNE to organize, develop control or regulate their import business from India. (e) To negotiate and finalise the prices for India Exporters of frozen marine products and to communicate such and other related information to NEPTUNE. Article 4 of the agreement states: LAXMI shall also do everything that is required to ensure highest standards of quality hygiene and freshness of products including supervision at various stages. 3. The agreement made with other principles (sic- principals) are also on similar lines. 38.3. In this case, of course, the Appellate Authority took note of various activities of the appellant with and for the buyer concerned and, while disallowing 20% of the service charges received from foreign enterprises towards the services rendered in India, allowed deduction under Section 80-O to the extent of the net income arising out of 80% of such charges received from foreign enterprises. 38.4. The order so passed by the Appellate Authority was challenged both by the appellant and by the revenue before ITAT in ITA No. 580/Coch/2004 and ITA No. 618/Coch/2004 respectively. The ITAT referred to its earlier decision in the case of the other assessee Ramnath & Co. (as referred to hereinabove) and following the same, allowed the appeal of the appellant and dismissed that of the revenue and thereby, allowed the claim of appellant for deduction in toto. 38.5. Although, from the fact sheet of this case, it does not appear if the agreements of this appellant also carried the default clauses as we have noticed in the lead case but, on all other major features, the agreements had been of the same nature and again, this appellant has also failed to bring any material on record to show if it had received any specific consideration referable to the activities envisaged by Section 80-O of the Act. In the given set of facts and circumstances, this appellant also turns out to be only a procuring agent and not beyond. Hence, this appeal also deserves to be dismissed. Conclusion

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14.2. The aspect germane to the present case is that forerunner to the provision relating to deduction of tax on royalties etc., received from certain foreign companies, was Section 85-C in the Act of 1961, that was inserted by Act No.13 of 1966 w.e.f. 01.04.1966 and was placed in Chapter VII. The said Section 85-C and several other provisions of Chapter VII were omitted by Section 33, read with Third Schedule, item 14, of the Finance (No.2) Act, 1967. The reason for omission of the said Section 85-C was that similar provision, with revised requirements, came to be introduced by way of Section 80-O in the new Chapter VI-A - .14.3. Section 80-O as introduced in Chapter VI-A got several modifications/alterations in regard to the entities eligible to claim such deductions as also the extent (that is percentage) of admissible deduction, but the core of object remained that of encouraging the export of Indian technical know-how and augmentation of the foreign exchange reserves of the country. While the relief was originally admitted in Section 80-O for dealing with a foreign company only, but later on, dealing with a foreign Government or foreign enterprise was included and thereby, the scope of coverage and activities was substantially expanded. However, as noticed from the erstwhile Section 85-C and the originally inserted Section 80-O, any such agreement with the foreign entity required the approval of Central Government and this requirement was later on altered to that of the approval of CBDT. Various other features and aspects related with the development and operation of Section 80-O, as then existing, were dealt with by the two circulars referred to on behalf of the revenue that is, Circular No. 187 dated 23.12.1975 and Circular No. 253 dated 30.04.1979.14.4 There had been several other modifications of Section 80-O from time to time. The relevant aspects noticeable for the present purpose are that the extent of deduction under Section 80-O was also altered from time to time and it even came to be allowed 100 per cent. but, by the Finance Act, 1984, it was reduced to 50 per cent. of the referred income. Then, the requirement of approval by CBDT was substituted by Finance Act, 1988 to the approval by Chief Commissioner or Director General. However, by Finance (No. 2) Act of 1991, even that requirement was deleted. In fact, the Finance (No. 2) Act of 1991 brought about a sea of changes in Section 80- O whereby, first and second provisos were omitted and the above- mentioned clause (iii) of Explanation was inserted. The words or a person (other than a company) who is resident in India were also inserted by this very Finance (No. 2) Act of 1991 expanding the reach of Section 80-O even to non-corporate tax payers. Moreover, the earlier expressions technical services were also altered to technical or professional services. There is no gainsaying the fact that Finance (No. 2) Act of 1991 led to a considerable recasting of Section 80-O of the Act of 1961 with substantial expansion of its ambit and area of coverage. These amendments were made applicable from the assessment year 1992-93 onwards and obviously, this had been the reason that the assessees like the appellant, who had earlier been taking the benefit of deduction under Section 80HHC with reference to their earning of foreign exchange, attempted to shift, for the purpose of deduction, to this provision of Section 80-O.14.6 In summation of what has been noticed hereinabove, it turns out that with the objectives of giving impetus to the functioning of Indian industries to provide intellectual property or information concerning industrial, commercial or scientific knowledge to the foreign countries so as to augment the foreign exchange earnings of our country and at the same time, earning a goodwill of the Indian technical know-how in the foreign countries, the provisions like Section 85-C earlier and Section 80-O later were inserted to the Act of 1961. Noteworthy it is that from time to time, the ambit and sphere of Section 80-O were expanded and even the dealings with foreign Government or foreign enterprise were included in place of foreign company as initially provided. The requirement of approval by the Central Government of any such arrangement was also modified and was ultimately done away with. Significantly, while initially the benefit of Section 80-O was envisaged only for an Indian company but later on, it was also extended to a person other than a company, who is resident of India. The extent of deduction had also varied from time to time.14.7. Broadly speaking, a few major and important factors related with Section 80-O of the Act of 1961, with reference to its background and its development, make it clear that the tax incentive for imparting technical know-how and akin specialities from our country to the foreign countries ultimately took the shape in the manner that earning of foreign exchange, by way of imparting intellectual property, or furnishing the information concerning industrial, commercial, scientific knowledge, or rendering of technical or professional services to the foreign Government or foreign enterprise, was made eligible for deduction in computation of total income, to the tune of 50 per cent. of the income so received. The finer details like those occurring in Explanation (iii) of Section 80-O were also taken care of by providing that the services envisaged by Section 80-O ought to be rendered outside India but they may be rendered from India, while making it clear that the services which are rendered in India would not qualify for such a deduction.15.1. So far the decision in the case of B. Suresh (supra) is concerned, it does not appear necessary to dilate on the same because the question involved therein was entirely different that is, as to whether the foreign exchange earned by transferring the right of exploitation of films outside India by way of lease was admissible for deduction under Section 80HHC of the Act, where the department attempted to contend that movies/films were not goods. However, having regard to the submissions made, we may look at the ratio from the other cited decisions in requisite details.17.3. In view of above and with reference to several other decisions, in Dilip Kumar & Co., the Constitution Bench summed up the principles as follows:-66. To sum up, we answer the reference holding as under:66.1. Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification66.2. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue66.3. The ratio in Sun Export case is not correct and all the decisions which took similar view as in Sun Export case stand overruled.(emphasis in bold supplied)17.4. Obviously, the generalised, rather sweeping, proposition stated in the case of Sun Export Corporation (supra) as also in other cases that in the matters of taxation, when two views are possible, the one favourable to assessee has to be preferred, stands specifically disapproved by the Constitution Bench in Dilip Kumar & Co. (supra). It has been laid down by the Constitution Bench in no uncertain terms that exemption notification has to be interpreted strictly; the burden of proving its applicability is on the assessee; and in case of any ambiguity, the benefit thereof cannot be claimed by the subject/assessee, rather it would be interpreted in favour of the revenue.In this regard, we may observe that deductions, exemptions, rebates et cetera are the different species of incentives extended by the Act of 1961 . In other words, incentive is a generic term and deduction is one of its species; exemption is another. Furthermore, Section 80-O is only one of the provisions in the Act of 1961 dealing with incentive; and even as regards the incentive for earning or saving foreign exchange, there are other provisions in the Act, including Section 80HHC, whereunder the appellant was indeed taking benefit before the assessment year 1993–94.19. Without expanding unnecessarily on variegated provisions dealing with different incentives, suffice would be to notice that the proposition that incentive provisions must receive liberal interpretation or to say, leaning in favour of grant of relief to the assessee is not an approach countenanced by this Court. The law declared by the Constitution Bench in relation to exemption notification, proprio vigore, would apply to the interpretation and application of any akin proposition in the taxing statutes for exemption, deduction, rebate et al., which all are essentially the form of tax incentives given by the Government to incite or encourage or support any particular activity.20. The principles laid down by the Constitution Bench, when applied to incentive provisions like those for deduction, would also be that the burden lies on the assessee to prove its applicability to his case; and if there be any ambiguity in the deduction clause, the same is subject to strict interpretation with the result that the benefit of such ambiguity cannot be claimed by the assessee, rather it would be interpreted in favour of the revenue. In view of the Constitution Bench decision in Dilip Kumar & Co. (supra), the generalised observations in Baby Marine Exports (supra) with reference to a few other decisions, that a tax incentive provision must receive liberal interpretation, cannot be considered to be a sound statement of law; rather the applicable principles would be those enunciated in Wood Papers Ltd. (supra), which have been precisely approved by the Constitution Bench. Thus, at and until the stage of finding out eligibility to claim deduction, the ambit and scope of the provision for the purpose of its applicability cannot be expanded or widened and remains subject to strict interpretation but, once eligibility is decided in favour of the person claiming such deduction, it could be construed liberally in regard to other requirements, which may be formal or directory in nature.21. As noticed, Section 80-O of the Act has a unique purpose and hence, peculiarities of its own. Applying the aforesaid principles to an enquiry for the purpose of a claim of deduction under Section 80-O of the Act as applicable to the present case, evident it is that for the purpose of eligibility, the service or activity has to precisely conform to what has been envisaged by the provision read with its explanation; and the other requirements of receiving convertible foreign exchange etc., are also to be fulfilled. It is only after that stage is crossed and a particular activity falls within the ambit of Section 80-O, this provision will apply with full force and may be given liberal application. The basic question, therefore, would remain as to whether the suggested activity of appellant had been of rendering such service from India to its principals in foreign country which answers to the description provided by the provision. As regards this enquiry, nothing of any liberal approach is envisaged. The activity must strictly conform to the requirements of Section 80-O of the Act.In our view, this part of criticism on behalf of the appellant on the approach of the High Court is entirely inapt and rather unnecessary. The referred observations in the majority view in Abhiram Singhs case occurred in relation to the interpretation of Section 123(3) of the Representation of People Act, 1951, which is aimed at curbing the unwarranted tendencies of communalism during election campaign and operates in entirely different fields of social welfare and ethos of democracy.22.2. In the setup of the present case, for a proper comprehension of the contents and text of the relevant provision of Section 80-O and Explanation (iii), which are carrying even the minute distinction of the expressions from India and in India, recourse to lexical semantics has been inevitable. However, in all fairness, the High Court has not only discussed semantics and dictionary meanings but, has equally looked at the object and purpose of Section 80-O of the Act. Hence, without further expanding on this issue, suffice it to say for the present purpose that the submissions against the approach of High Court with reference to the decision in Abhiram Singh (supra) does not advance the cause of the appellant.24.3. Though it has been painstakingly contended on behalf of the appellant that the decision in J.B. Boda & Co. should be decisive of the matter because even the brokerage of a reinsurance broker was held eligible for deduction under Section 80-O of the Act but, we are afraid, the said decision has no relevance whatsoever to the question at hand. The eligibility of the concerned services of reinsurance broker for the purpose of Section 80-O was not even a question involved therein. Needless to observe that the business of insurance carries its own peculiarities where the factor of risk involved is of unique significance; and any information and assessment of risk involved is itself a specialised task related with the business of insurance. In the fact sheet of the case in J.B. Boda & Co., in the every opening paragraph of judgment, it has been distinctively recorded that in respect of the insurance risk covered by Indian or foreign insurance companies, the appellant had been arranging for the reinsurance of a portion of risk with various reinsurance companies either directly or through foreign brokers. As regards, the services of the appellant with a broker in London, the Court noted, inter alia, that the appellant furnished all the details about the risk involved, the premium payable, the period of coverage and the portion of the risk which is sought to be reinsured. Without entering into further details of the activities of the said assessee, suffice it to say for the present purpose that the submissions on behalf of the appellant, as if the task of a broker of reinsurance is not technical in nature, could only be rejected as being not in conformity with the peculiarities of insurance business. In any case, as observed hereinbefore, this aspect does not require further elaboration because of entirely different question involved and decided by this Court in J.B. Boda & Co.25.4 The decision in E.P.W. Da Costa, again, does not make out any case in favour of the appellant.26.3. The case of B.L. Passi (supra) had not been a matter where nothing at all was on record. Indeed the letters exchanged by the assessee with the principal were on record, but the core of information that was allegedly supplied by the assessee to the foreign company, was not furnished, nor it was shown as to how that information was utilized by the foreign company and further, it was also not shown as to how the service charges payable to the assessee were computed when it was to get the payment on the basis of sale to be made by the foreign company. These crucial facts and factors directly co-relate with the requirements of Section 80-O of the Act; and upon the assessee failing to meet with such requirements, the claim for deduction under Section 80-O failed.28. As noticed, in the present case, in the very first place, the Assessing Officer, while dealing with the assessment in question, raised the queries and sought clarifications from the appellant with reference to the enunciations in the decision of this Court in the case of Continental Construction (supra). Then, the High Court has also noticed in its impugned judgment that this was one of the decisions relied upon by the learned counsel for the assessee. A comment has been made in the reply submissions on behalf of the revenue before us that the appellant has given up reliance on this decision for the reasons that the ratio essentially operates against the appellant. The response on behalf of the appellant has been that reference to this decision by revenue was entirely unnecessary for the same not being relied upon. Needless to observe that it being a decision of this Court, the ratio and the principle emanating therefrom cannot be ignored, whether relied upon by the appellant or not. Moreover, the said decision has been rendered by a 3-Judge Bench of this Court and has the force of a binding precedent. Having regard to the submissions made and the questions raised, reference to the decision of this Court in the case of Continental Construction (supra) is indispensable.28.4. A few aspects at once emerge from the said decision in Continental Construction that even under the provisions of Section 80-O of the Act as then existing, whereunder prior approval of CBDT was required to claim deduction, this Court underscored that deduction would be available only in relation to the consideration attributable to the information and services envisaged by Section 80-O and deduction would be granted to the extent of such consideration; and all these aspects were to be examined by the Assessing Officer while making the assessment.29. In the impugned judgment, the decision of High Court of Madras in the case of Khursheed Anwar (supra) has also been taken note of. Therein too, the claim for deduction under Section 80-O of the Act was declined for want of necessary material while observing that the benefit of Section 80-O cannot be claimed by merely asking for the same; it has to be substantiated with the requisite record. In the said case, on the query of the Assessing Officer, the assessee had submitted its reply but could not furnish the material so as to bring the case within the four corners of Section 80-O of the Act. The High Court, inter alia, observed as under (at p. 474 of ITR):Having regard to the above discussions, in our view, as the assessee has not established his claim for deduction by producing the relevant records, the Tribunal has erred in reversing the finding of the Commissioner of Income-tax (Appeals) rendered on the basis that the assessee was not entitled to the benefit in view of the fact that the commission received by the assessee was not for any of the activities mentioned in paragraph 4.1 of the order of the Commissioner of Income-tax (Appeals). There is absolutely no reason adduced by the Tribunal to reverse the said finding. We must also mention here that during the course of arguments, as we found that there were no supporting materials for the claim, we directed the assessees counsel to produce the materials, if any, available for our perusal. The learned counsel for the assessee, though had produced the explanation of the assessee dated March 28, 1998, he was unable to produce any materials to sustain any of the contentions made in the said letter. In the absence of any materials to show that what was passed on to the foreign enterprise was the information concerning with commercial or technical or scientific aid, merely because an agreement is entered into between the assessee and the foreign enterprise, we are not inclined to accept the claim of deduction under section 80-O of the Act. Accordingly, the second substantial question of law is answered in favour of the revenue and against the assessee. The tax case appeal is allowed in part. No costs.. From the decisions aforesaid, it could be immediately culled out that for bringing any particular foreign exchange receipt within the ambit of Section 80-O for deduction, it must be a consideration attributable to information and service contemplated by Section 80-O; and in case of a contract involving multiple or manifold activities and obligations, every consideration received therein in foreign exchange will not ipso facto fall within the ambit of Section 80-O. It has to be attributable to the information or service contemplated by the provision and only that part of foreign exchange receipt, which is so attributable to the activity contemplated by Section 80-O, would qualify for claiming deduction. Such enquiry is required to be made by the Assessing Officer; and for the purpose of this imperative enquiry, requisite material ought to be placed by the assessee to co-relate the foreign exchange receipt with information/service referable to Section 80-O. Evidently, such an enquiry by the Assessing Officer could be made only if concrete material is placed on record to show the requisite co- relation.31. Coming to the facts of the present case, the agreements of the appellant with the foreign entities primarily show that the appellant was to locate the source of supply of the referred merchandise and inform the principals; to keep liaison with the agencies carrying out organoleptic/bacteriological analysis and communicate the result of inspection; to make available to the foreign principals the analysis of seafood supply situation and prices; and to keep the foreign principals informed of the latest trends in the market and also to negotiate and finalise the prices. As per the agreements, in lieu of such services, the appellant was to receive the agreed commission on the invoice amounts.32. In contrast to what has been observed in the cases of J.B. Boda & Co. (advising on the risk factor related to the proposed insurance/reinsurance) and E.P.W. Da Costa (dealing with statistical analysis of data collected), what turns out as regards the activities/services of the appellant is that the appellant was essentially to ensure supply of enough quantity of good quality merchandise in proper packing and at competitive prices to the satisfaction of the principals. This has essentially been the job of a procuring agent. Though the expressions expert information and advice, analysis, technical guidance etc., have been used in the agreements but, these expressions cannot be read out of context and de hors the purpose of the agreement. All the clauses of the agreements read together make it absolutely clear that the appellant was merely a procuring agent and it was his responsibility to ensure that proper goods are supplied in proper packing to the satisfaction of the principal. All other services or activities mentioned in the agreements were only incidental to its main functioning as agent. Significantly, the payment to the appellant, whatever label it might have carried, was only on the basis of the amount of invoice pertaining to the goods. There had not been any provision for any specific payment referable to the so-called analysis or technical guidance or advice. Viewed from any angle, the services of the appellant were nothing but of an agent, who was procuring the merchandise for its principals; and such services by the appellant, as agent, were rendered in India. Even if certain information was sent by the assessee to the principals, the information did not fall in the category of such professional services or information which could justify its claim for deduction under Section 80-O of the Act. In other words, in the holistic view of the terms of the agreements, we have not an iota of doubt that the appellant was only a procuring agent, as rightly described by the High Court.33.1. In both the agreements, the default clauses make it more than clear that if the quality of goods was found to be unsatisfactory to the principals after inspection in their respective countries, they shall have no responsibility to pay the agents fees. If at all it had been a matter of the appellant furnishing some technical or material information which served the foreign enterprises in making the decision for procurement, in the ordinary circumstances, after completion of such service and its utilization by the foreign enterprises, the appellant was likely to receive the professional service charges for furnishing such information but, contrary and converse to it, the agreements provide for no payment to the appellant in case of principal being dissatisfied with goods. These default clauses effectively demolish the case of the appellant and fortify the submissions of the revenue that the appellant was merely a procuring agent and nothing more.34. The matter can be viewed from yet another angle, as indicated by the High Court in the last paragraph of its judgment. If at all it be assumed that out of various tasks mentioned in the agreements, some of them involved such services which answered to the requirements of Section 80- O, it was definitely required of the appellant to establish as to what had been such information of special nature or of expertise that was given by it and how the same was utilised, if at all, by the foreign enterprises; and how much of the foreign exchange receipt was attributable to such special service. Obviously, the appellant did not supply such particulars. As noticed, the High Court posed a pointed query to the learned counsel appearing for the appellant as to whether all the services mentioned in the agreement would come within the purview of Section 80-O. The cryptic response to this query on behalf to the appellant had been that if the recipient of services is situated outside, all the services rendered by the assessee in terms of the agreement come within the sweep of the provision. It was specifically contended on behalf of the appellant that establishing which of its services qualifies for the deduction is of no consequence, rather unnecessary. In our view, this response was not in conformity with the requirements of Section 80-O of the Act, as explained and applied by this Court in Continental Construction and in B. L. Passi (supra) as also as applied by Madras High Court in Khursheed Anwar (supra). Rather, this stand, in our view, puts the final curtain on the appellants case because most of the services in the agreements in question were those of an agent ensuring supply; and if any part of the services co-related with Section 80-O, the particulars were of utmost significance and were fundamentally necessary which the appellant had never supplied. Merely for having a contract with a foreign enterprise and mere earning foreign exchange does not ipso facto lead to the application of Section 80-O of the Act.35. The effect of Circular No.700 dated 23.03.1995 is only to the extent that once the service is rendered from India, even if its ultimate use by the foreign enterprise occurs in India, the matter may not go out of Section 80- O of the Act. This clarification is in tune with the nature of this provision meant for extending incentive but it does not do away with the basic requirements that to qualify for deduction under Section 80-O, the service must be rendered from India to foreign enterprise and the nature of service ought to be as delineated in Section 80-O. Ultimate use of the service could be in India, as illustrated by the case of E.P.W. Da Costa (supra) and by the cases of Li & Fung and Chakiath Agencies (supra) that were cited before the High Court. However, the claim of the appellant fails at the threshold for the reasons foregoing. Circular No.700 dated 23.03.1995 is neither of any application to this case nor of any assistance to the appellant. The appellant is not entitled to claim deduction under Section 80-O of the Act.36. For what we have discussed hereinabove, it is also apparent that the Appellate Authority as also the ITAT had viewed the present case from an altogether wrong angle. As noticed, the Appellate Authority even did not comprehend the observations in E.P.W. Da Costa (supra) and assumed that every information is scientific knowledge. On facts, the Appellate Authority observed that even if acting as agent of the foreign enterprises, the appellant was locating the sources of frozen seafoods, bringing the foreign enterprises in contact with the manufacturers or processors of seafood, and negotiating with the local packers; and these activities, though carried out in India, had been on behalf of the foreign enterprises. The ITAT, though took note of different services contemplated by the agreements in question and even observed that the clauses like those requiring the appellant to settle the claim with manufacturers might be the services rendered in India but then, proceeded to assume, without any cogent material on record, that other services were rendered from India and on that basis, the foreign party took its decision. Even in this regard, the questions relevant and germane to the enquiry were not even gone into inasmuch as, it was not examined as to what and which part of the consideration was attributable to the services envisaged by Section 80-O of the Act, which were rendered from India. Therefore, the findings of the Appellate Authority and ITAT, being based on irrelevant considerations while ignoring the relevant aspects, were neither of binding nature nor could have been decisive of the matter. Hence, neither anything turns upon the submissions made on behalf of the appellant with reference to the decision in K. Ravindranathan Nair (supra) nor this aspect requires any further discussion.37. In our view, the High Court has rightly analysed the entire matter with reference to the relevant questions and has rightly proceeded on the law applicable to the case. The impugned judgment calls for no interference.The appellant M/s Laxmi Agencies - the appeal arising out of SLP (Civil) No.23699 of 2016 .38.5. Although, from the fact sheet of this case, it does not appear if the agreements of this appellant also carried the default clauses as we have noticed in the lead case but, on all other major features, the agreements had been of the same nature and again, this appellant has also failed to bring any material on record to show if it had received any specific consideration referable to the activities envisaged by Section 80-O of the Act. In the given set of facts and circumstances, this appellant also turns out to be only a procuring agent and not beyond. Hence, this appeal also deserves to be dismissed.