S. RAJENDRA BABU, J. ( 1 ) THE petitioner entered into an agreement with the Federal Military Government of the Federal Republic of Nigeria and applied for grant of approval and deductions as contemplated u/s 80-0 of the income-tax Act, 1961 (hereinafter referred to as the Act) to the 1st respondent. The agreement consisted of various types of passing of technical information, knowhow, designs, trade mark, logo and also training of Nigerian personnel in India among other matters. Article 15,1 of the agreement speaks about the payment of royalty which is at the rate of 2 percent of value added for seven years in respect of the right granted to the Nigerian Government for exclusive use in that country and other ECOWAS (Economic Community of west African States) countries as provided in Articles 4. 1 and 4. 1. 1. The first respondent took the view that the same is a trade restriction on the petitioner and the consideration in respect of that restriction is outside the scope of Section 80-0 of the act and, therefore, declined to grant approval so as to entitle them for deduction u/s 80-0 of the Act. On the question of training Nigerian personnel in India as provided in Article 4. 1 read with (d) of article 4. 1. 2 of the agreement and a technical fee paid thereof under Art. 14 9, the 1st respondent stated that the training of Nigerian personnel in India would mean a service rendered in India and therefore the fee receivable in this respect would not be entitled to the benefit of Section 80-0 of the Act. ( 2 ) PETITIONER is aggrieved by thedeletion of these two items from the approval granted by the 1st respondent- board and therefore has sought for relief at the hands of this Court. ( 3 ) SO the two questions that fall forconsideration are : (i) Whether the petitioner is entitled to the benefit u/s 80-0 of the Act in regard to the royalty paid under Article 15. 1 In respect of the right granted under Article 4. 1 and 4. 1. 1 of the agreement. (ii) Whether training of Nigerian personnel in India and training fee paid in regard thereof would be entitled to such deduction. 1 In respect of the right granted under Article 4. 1 and 4. 1. 1 of the agreement. (ii) Whether training of Nigerian personnel in India and training fee paid in regard thereof would be entitled to such deduction. ( 4 ) SO far as the first question isconcerned, it is necessary to set out the relevant article for the purpose of proper appreciation of the matter in dispute. It reads : "4. 1 HMT shall grant to the Company the exclusive right to manufacture the PRODUCTS as may be selected by the COMPANY in consultation with hmt under licence in Nigeria and the exclusive right to sell such PRODUCTS in Nigeria apd other member countries of ECOWAS by providing necessary technical data, information and assistance under this agreement and under a trademark and/or Name as may be mutually agreed by both parties. 4. 1. 1. HMT shall permit the COMPANY to use such Trademark and/or name and to exhibit HMT Logo at such appropriate places as HMT may authorise during the duration of this agreement. " and royalty in relation thereto is dealt with in Article 15. 1 of the agreement, which reads as follows : " 15. 1 Royalty shall be paid at the rate of 2 per cent of value-added for 7 years for granting the exclusive rights to the COMPANY for use in ECOWAS countries the technical information, know-how, designs, trade mark, logo and to manufacture and sell units of each PRODUCT from the first sale of each PRODUCT. " what is provided under Article 4. 1 is only a right of manufacture of products as may be selected by the Nigerian Government in consultation with the petitioner under licence in Nigeria and exclusive right to sell such products in Nigeria and other ecowas countries by providing necessary technical data, information and assistance and also to use the trademark, name and to exhibit the HMT logo. I do not find anywhere in this article or in Article 15. 1 any restriction at ail. What is done is granting of a positive right in favour of the Nigerian Government to do certain things and royalty always arises only in cases where a right is conferred on any person to be utilised and not in cases where such a right is not granted. 1 any restriction at ail. What is done is granting of a positive right in favour of the Nigerian Government to do certain things and royalty always arises only in cases where a right is conferred on any person to be utilised and not in cases where such a right is not granted. Therefore, such a transaction cannot be termed as a restriction at all as has been done by the board in this case. Hence, on the first question the answer must be in favour of the petitioner and I hold that the Board was not right in treating the article in question as a trade restriction not falling within the scope of Section 80-0 of the act. It clearly falls within the first limb of Section 80-0 of the Act. It provides for any royalty that is payable in consideration of the use of any right outside the country. The same attracts deduction u/s. 80-0 of the Act. Hence, i have no hesitation in answering the first question accordingly. ( 5 ) SO far as the second question isconcerned, the petitioner in the application filed for the purpose of claiming the benefit, showed this claim against technical service rendered or agreed to be rendered outside India. It is stated by the petitioner that it was done under a mistaken impression and the same was corrected by sending a letter dated 8th october 1980 as per Annexure-F. But, what is to be seen is whether training nigerian personnel in India is a service rendered in India and therefore does not attract the deduction provided u/s 80-0 of the Act as held by the Board or in any other manner does not come within Section 80-0 of the Act. The learned counsel for the petitioner urged before me that it is not a case of rendering technical service at all inasmuch as the assessee is not rendering any service but, on the other hand, is imparting skill and expertise in the matter of handling machinery and therefore it clearly falls within the first limb of Section 80-0 of the Act. According to the learned counsel as long as such skill is used outside India the place where it is made available woyld be irrelevant and the restriction so far as rendering of technical services mentioned in the latter limb of section 80-0 of the Act would not be attracted to the facts of this case. I will proceed on the basis that the service rendered by the petitioner in imparting training to the Nigerian personnel in India is not a technical service for the purpose of this case. It is not necessary to decide whether such imparting of knowledge also falls within the expression of rendering of technical service'. Petitioner gives training to the personnel of Nigerian Government in India. Section 80-0 of the Act provides that where any consideration is received in respect of any patent, invention, model, design, secret formula or process or similar property right or information concerning industry, commerce or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to such enterprise by the assessee for use outside India, the deduction would be attracted. It is clear from a reading of this clause relating to imparting of scientific knowledge, experience or skill made available shall be of the assesses as the latter clause'by the assessee' clearly controls the earlier expressions used in this connection. Here, in the present case, Nigerian personnel are trained in India and once they go out of the country it is their skill that is used outside ; it is not the skill of the assessee that is used outside. Therefore even assuming for a moment that the argument of the learned counsel for the petitioner is right that does not come within the expression of 'technical service' as such service is not rendered by the assessee outside india, by imparting training to the personnel of the Nigerian Government it cannot be said that the same would fall within the deduction granted u/s 80-0 of the Act. Therefore, the view of the Board on this aspect of the matter appears to be correct. ( 6 ) IN the circumstances, the petitioner partly succeeds in this petition. Theorder made by the Board insofar as it refuses to grant approval for deduction u/s 80-0 of the Act in respect of royalty fee under Article 15. 1 of the agreement on the right granted under Arts. 4. ( 6 ) IN the circumstances, the petitioner partly succeeds in this petition. Theorder made by the Board insofar as it refuses to grant approval for deduction u/s 80-0 of the Act in respect of royalty fee under Article 15. 1 of the agreement on the right granted under Arts. 4. 1 and 4. 1. 1 is quashed and there shall be a direction to the Board to grant such approval and deduction as aforesaid. Petition partly allowed and rule made absolute accordingly. --- *** --- .