M.N. Roy, J.
1. The petitioner, R. G. Sales (P.) Ltd., (hereinafter referred to as 'the said petitioners'), is a company incorporated under the Companies Act, 1956, and in the petition it has been stated that the said petitioner carries on business, inter alia, of supplying technical know-how in respect of steel foundries, electric arc furnaces and/or for the manufacture of alloy steel castings, etc. It was the case of the said petitioner that M/s. Ashoka Cement Ltd. has a unit known as Ashoka Steels at Dalmianagar in Bihar, where steel castings are manufactured.
2. The said petitioner has further stated that by an agreement dated 13th December, 1969, entered into between them and the said Ashoka Steels, the said petitioner was appointed as selling agents-cum-technical advisers, to handle the sale of the said Ashoka Steels in India and to render technical advice to them, for the manufacture of various products in the concerned steel foundry. Such agreement was valid for three years with effect from 1st October, 1969. It has also been stated, that by the said agreement, the said petitioner was appointed as selling agent of the products of the said Ashoka Steels throughout India, apart from having a power to appoint other agents, on such terms and conditions as the said petitioner may deem fit and proper. The particulars of the requirements under the agreement dated 13th December, 1969, as mentioned above, have been mentioned in the petition and the said petitioner has further stated that under the said agreement they were required to take steps for improved production and also to prepare and submit a project report with a complete study of the existing facilities and such facilities which would be required. The said petitioner has stated that in terms of the said agreement, they have made a detailed study of the concerned steel foundry and the plant and so also the machineries and provided the said Ashoka Steels the required technical know-how for the purpose of a proper running of the concerned steel foundry and for improved production.
3. The said petitioner has stated that there was another agreement dated 30th October, 1972, which was entered into between them and the said Ashoka Steels and by that agreement also they were appointed as technical adviser with effect from 1st October, 1972, for the purpose of rendering technical assistance in connection with the concerned steel and alloy steel foundry of the said Ashoka Steels and that too for the manufacture of steel castings amongst others. The particulars of this agreement have also been mentioned in the petition and the said petitioner has further stated that in terms of the same they have made a detailed study of the concerned steel foundry and plant and so also the machines of the said Ashoka Steels for providing them the necessary technical know-how for a proper running of the foundry and for improving the production.
4. Section 80MM of the I.T. Act, 1961 (hereinafter referred to 'as the said Act'), was brought into the statute and/or sought to be given effect to with effect from 1st April, 1975, and the said section lays down the procedure, manner and the requirement in case of deduction in the case of an Indian company in respect of royalties, etc., received from any concern in India and the relevant provisions of the said section which would be appropriate for our consideration, are Section 80MM(1)(i) and Section 80MM(2)(iv), and they are quoted hereunder :
'(1) (i) The provision of technical know-how which is likely to assist in the manufacture or processing of goods or materials, or in the installation or erection of machinery or plant for such manufacture or processing, or in the working of a mine, oil well or other source of mineral deposits, or in the search for, or discovery or testing of, mineral deposits or the winning of access to them, or in carrying out any operation relating to agriculture, animal husbandry, dairy or poultry farming, forestry or fishing.....
(2)(iv) the imparting of any information concerning industrial, commercial or scientific knowledge, experience or skill.'
5. The said Section 80MM also speaks or contemplates of a circular and in fact, such circular, bearing No. 124/13-11-73, dated 13th November, 1973, was issued and thereby the guidelines evolved by the Board for the grant of privileges through agreement under the section as mentioned have been laid down.
6. It was the case of the said petitioner that pursuant to such guidelines, rules have been made by them for necessary benefit under the subsections of Section 80MM as quoted and all relevant data, documents and so also the particulars, which were asked for were supplied. The said petitioner has further stated that by the order dated 6th Jane, 1974, the Board had rejected the prayers or claims of the said petitioner, on the following amongst other grounds :
'(i) The agreement dated 13-12-69 is for your appointment as the selling agents for the products of Ashoka Steels throughout India and is not for provision by you of a technical know-how within the meaning of Clause (i) of Sub-section (1) read with Sub-section (2) of Section 80MM or for rendering any services in connection with the provision of technical know-how. Although it is stated in Clause (3) of para. 1 of the agreement that you shall render all technical assistance for the improvement of the production and quality of the steel products, no fee is payable to you for rendering any such technical assistance as per Clause (4) of para. IV of the agreement.
(ii) The agreement dated 30-10-72 for your appointment as technical adviser is for rendering technical assistance for the improvement of the production and quality of the steel products. The work and services to be done by you under this agreement as technical adviser are related to and are in the context of your obligation as a selling agent for the products of the Ashoka Steel Foundry. These do not constitute provision of technical know-how within the meaning of Clause (i) of Sub-section (1) read with Sub-section (2) of Section 80MM or rendering of services in connection with the provision of such technical know-how. In any case, the Board feels that the agreement is now (not ?) such as will further the objectives underlying the grant of the tax relief admissible Under Section 80MM and is, therefore, not fit for approval.'
7. Mr. Bajoria, appropriately stated that the real grounds are grounds Nos. (i) and (ii) as quoted hereinbefore and the mentioning of the words, 'amongst others' would be of no avail or effect. Since the order as made cannot, in my view, travel beyond the specific findings by the use of the words 'amongst others' and other findings on any other facts or point, excepting those specifically mentioned and decided, cannot be looked into or considered. He also claimed that since there was no bar for the said petitioner to become a selling agent and, at the same time, to enter into a contract for the supply of technical services, the determinations as made, were improper. In the statute, in fact, there was no bar for the said company to have the two characters as mentioned above and, as such, the refusal as made by the Board on such ground were not perhaps correct. I further have it on record that in terms of the directions by the Board the necessary particulars were supplied by the petitioner, so it was expected of the Board, to deal with them and consider such particulars in accordance with law and in the light of the observations as made and that there would be no bar for the said petitioner to enter into agreement, (1) for having the sole selling agency, and also (2) for supplying the technical services.
8. This rule was made ready as regards service on 29th August, 1977, and I am informed that an opposition has been filed through Mr. Samar Banerjee. Such opposition was not available in the record.
9. Mr. Bajoria has, of course, filed his clients' reply. Let such reply be kept in the record.
10. For the views which I have expressed, I make this rule absolute, set aside the determinations by the Board as mentioned above and send the matter back to them for further consideration and determination of the matter in accordance with law.