SABYASACHI MUKHARJI, J.

( 1 ) IN this reference under Section 256 (1) of the I. T. Act, 1961, the following question has been referred to this court:"whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the amounts described as 'commission' in the agreement dated 9th October, 1956, between the asses-see and the Indian Iron and Steel Co. were in the nature of royalties and fees covered by the exemption provided in Rule l (ix) and Rule l (x) of the First Schedule to the Companies (Profits) Surtax Act, 1964, and were liable to be excluded from the total income of the assessee in computing the chargeable profits for the assessment years 1965-66, 1966-67, 1967-68 and 1969-70?"

( 2 ) THIS reference arises out of the assessment for the assessment years 1965-66, 1966-67, 1967-68 and 1969-70 under the provisions of the C. (P.) S. T. Act, 1964. Now it would be relevant to refer to the relevant provisions of the said Act. The First Schedule to the said Act" provides rules for computing the chargeable profits under the provisions of that Act. Rule I stipulates that income, profits and gains and other sums falling within the-clauses mentioned thereafter should be excluded from the total income of Clauses (ix) and (x ). Clause (ix) of Rule 1 of the First Schedule to the said Act reads as follows : "income by way of royalties received from Government or a local authority or any Indian concern. "

( 3 ) CLAUSE (x) reads as follows : "in the case of a non-resident company which has not made the prescribed arrangements for the declaration and payment of dividends within India, its income by way of any interest or fees for rendering technical services received from Government or a local authority or any Indian concern. '"

( 4 ) THE question before us is whether the amounts mentioned in the orders which are under appeal before the Tribunal would come within the expression "income by way of royalties received from local government or local authority or any Indian concern "and similarly" in the case of a nonresident company ", which the assessee is in the instant reference before us, "its income by way of any interest or fees for rendering technical services received from Government or a local authority or any Indian concern" or in other words whether the amounts in dispute were royalties received from an Indian concern so far as the assessee is concerned or whether it should be considered to be fees for rendering technical services. Therefore, the controversy centres round the true nature and character of the amounts of Rs. 7,85,967, Rs. 8,56,670, Rs. 12,40,990 and Rs. 6,72,480. It wasclaimed by the assessee before the ITO that under Clauses (ix) and (x) of Rule 1 of the First Schedule to the Surtax Act the above amounts were excluded by the assessee from the total income for the purpose of computation of chargeable profits as they represented royalties and fees for rendering technical services as received by the non-resident assessee from the Indian Iron and Steel Co. Ltd. (hereinafter referred to as the "iisco" ). Since the assessee had no other source of income in India, the chargeable profits were shown as nil by it. The agreement between the assessee and the IISCO has referred the these amounts as "commission" and so, the ITO did not accept the plea that these amounts represented royalties or technical fees and, therefore, did not grant exemption in respect of these amounts under Rule 1 (ix) and Rule l (x) of the First Schedule to the said Act. The question is whether these amounts were really "commission" as described in the agreement or these amounts could be described as either royalties or commission as was claimed by the assessee. The AAC was also of the opinion that the expression "commission" advisedly used by the parties to the agreement could not be ignored or re-defined so as to suit the convenience of the assessee. He, therefore, held that the assessee's contention was not te

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