Commissioner Of Income Tax & Another. ……… v. M/S S.k. Dynamics Pvt. Ltd. ..………

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Income Tax Appeal No. 166 of 2007 Income Tax Appeal No. 8 of 2008 Commissioner of Income Tax & another. ………. Appellants Versus M/s S.K. Dynamics Pvt. Ltd. ..………. Respondent Mr. Hari Mohan Bhatia, Advocate for the appellants. Ms. Puja Banga, Advocate for the respondent. JUDGMENT Coram: Hon’ble Barin Ghosh, C.J. Hon’ble U.C. Dhyani, J. BARIN GHOSH, C. J. (Oral) These Appeals address the same issue and are in relation to different Assessment Years. The question is, whether the assessee was entitled to the benefits of Section 80-O of The Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. There is no dispute that the assessee received income from foreign enterprises in consideration for the use outside India of a patent registered in the name of Sri Rakesh Goel, Managing Director of the assessee Company, in convertible foreign exchange in India. According to the appellants, since the assessee Company was not the owner of the patent and the same was owned by Sri Rakesh Goel, assessee was not entitled to Section 80-O of the Act. The Tribunal has not accepted the said contention of the appellants in the judgments and orders under challenge in these appeals. 3. A taxing statute is required to be interpreted strictly and we rely strictly on the language used by the Legislature while making the statute. Section 80-O of the Act gives certain benefits to an assessee, who may be a company, i.e. juristic person, or a person, i.e. a non-juristic person, who is resident in India and who has received an income from the Government of a foreign State or a foreign enterprise in consideration for the use outside India of any patent, invention, design or registered trade mark and such income is received in convertible foreign exchange in India. The income, referred to in Section 80-O of the Act, must arise out of use outside India of any patent, invention, design or registered trade mark. When it is not in dispute that the income was received for the use outside India of a patent, the income squarely came under Section 80-O of the Act. It is true that the owner is normally entitled to the income, unless the owner has assigned right to income receivable by the owner. In the instant case, the owner has assigned the patent to the assessee Company. The right to receive income, therefore, also vested in the assessee Company during the relevant years. In the absence of an assignment, it could be urged that the assessee Company was not entitled to the income for use of the patent, as it had no interest in the patent, and, therefore, such income cannot be brought within Section 80-O of the Act. In view of the admitted assignment, such dispute could not arise in the instant case. 4. The appeals fail and the same are dismissed. G (U.C. Dhyani, J.) (Barin Ghosh, C. J.) 11.12.2012 11.12.2012