question for consideration is whether assessee is entitled for exemption under section 10(6) (vi) of Income tax Act, 1961 ('the Act') in respect of amounts remitted to Wean United of USA. 2. ITO held that assessee is not entitled for exemption under section 10(6) (vi). He directed assessee to deduct tax at source at 70 per cent on remittances. 3. assessee appealed to Commissioner (Appeals). He held that Wean United is not engaged in trade or business in India and does not appear to be income tax assessee in India. Accordingly question of allowance of remuneration paid by assessee to Mr. George Sweet in computation of income of Wean United in income tax assessment under INdia Income tax Act, 1922 will not arise. IN invoice it is stated that remuneration is payable to Mr. George Sweet. Thus, Wean United appears to have acted as conduti pipe for passing on remuneration collected from assessee in lieu of services rendered by Mr. George Sweet to assessee. Thus, remuneration was not paid to Wean United and was paid through it to be passed on to Mr. George Sweet. Accordingly this remuneration would not be available for deduction in assessment of Wean United of USA even assuming for argument's sake that Wean United is assessable to India income- tax. Further, stay of Mr. George Sweet in India was for 62 days. in view of this, remuneration of Mr. George Sweet is not assessable to Income-tax in India and it requires to be remitted in full without any deduction of tax at source under section 195 of Act. Thus, he directed ito to issue no-objection certificate for remittance of remuneration without any tax deduction at source under section 195(1). Against same revenue has preferred this appeal. 4. learned departmental representative kly urged that payment was made by assessee to wean united but not to Mr. George Sweet. There is business connection between assessee and wean united and so section 9 of act would apply. assessee is not entitled for exemption under section 10(6) (vi) . learned counsel of assessee kly urged that payment was to Mr. George Sweet through wean united for services rendered by former to assessee. Hence, assessee is entitled for exemption under section 10(6) (vi) as all conditions stipulated therein are satisfied. there is no business connection between assessee and wean united of USA. Hence, question of accrual of income under section 9 does not arise. He submitted that there is o direct agreement between wean united and assessee but it was only through engineering projects (India) Ltd. We united is neither assessed nor assessable in India. invoice clearly indicates that payment was for M r . George Sweet. Thus, he supported order oF Commissioner (Appeals). 5. We have considered rival submissions. assessee placed order with engineering projects (India) Ltd. Who in collaboration with wean united o f USA agreed to supply design, manufacture and supply of high speed precision tube mill for assessee's quoted tube project. After placing that order, there was correspondence by assessee directly with wean united of USA. In letter dated 23-10-1981 of wean united of USA addressed to assessee they have confirmed for equipment and also guaranteed performance. In case guaranteed speeds are not achieved they agreed to pay to assessee certain amount. In that letter it was stated that their engineer shall be available for supervision of erection and commissioning and during performance test runs. They have also stated their engineer shall also assist engineering projects (India) Ltd. to monitor project and inspect equipment manufactured in India as and when required. In their subsequent letter dated 9- 9-1982 addressed to assessee they have stated that Mr. George Sweet will be deputed for supervising erection and commissioning of tube mill on charges stated in that letter. Under clause 9 of order placed by assessee with engineering projects (India) Ltd., it is stated that services of wean united engineer shall be provided for supervising final stage of erection and commissioning of line. 6. above correspondence will clearly show that wean united of USA agreed to depute their engineer for supervision of erection and commissioning of plant. Accordingly, they sent Mr. George Sweet to India for supervision plant. Accordingly, they sent Mr. George Sweet to India for supervision and erection of plant. There is no direct agreement between assessee and Mr. George Sweet. payment was made directly to wean united of USA. Mr. George Sweet was not treated as employee of assessee during his stay in India. above facts will clearly prove that there was business connection between assessee and wean united of USA. invoice for payment by assessee was that of wean united. No doubt in that invoice name of Mr. George Sweet is mentioned as wean united serviceman and by letter dated 1-9-1980 by Mr. George Sweet addressed to wean united, he had acknowledged receipt of remuneration from it for his services rendered to assessee. That will not prove that there was any agreement by assessee with Mr. George Sweet and he became employee of assessee during his stay in India. in Bharat Heavy Plate & Vessels Ltd. v. Addl. CIT (1979) 119 ITR 986 (AP), non-resident rendered consultancy services for construction of plant and for purpose non-resident deputed to India group of plant of design experts. On above facts Andhra Pradesh High couirt held that sale of machinery took place outside India but on combined reading of agreements there is business connection between non-resident and assessee from which income accrued or arose to non-resident. above ration squarely applies to instant case. design machinery was supplied and erection was supervised by wean united engineer and this would clearly prove business connection between assessee and wean united of USA. 7. In our view, assessee is not entitled to exemption under section 10(6) (vi) because payment was made to wean united of USA as per agreement with them. payment is not made to Mr. George Sweet directly. If it is payment to Mr. George Sweet then only provision of section 10(6) (vi) would apply. Since payment is to to him payment is not entitled for exemption under section 10(6) (vi). Hence, assessee has to deduct tax at source at prescribed rate on remittances made to wean united. ITO is justified in not issuing no-objection certificate till tax is deducted. We revises order of Commissioner (Appeals) and restore order of ITO. 8. In result, appeal is allowed. *** INCOME TAX OFFICER v. NAGARJUNA COATED TUBES LTD.