9911796707
|
Home
Issues:
1. Eligibility of weighted deduction under section 35B for a professional engaged in business. 2. Treatment of foreign tour income as business income for the purpose of deduction under section 35B. Analysis: Issue 1: The appeal was filed by the department against the order of the Commissioner (Appeals) concerning the eligibility of the assessee, a professional playback singer, for weighted deduction under section 35B. The Income Tax Officer (ITO) had rejected the claim of the assessee, stating that the provisions of section 35B did not apply as the assessee was engaged in a profession and not in a business. The Commissioner (Appeals) relied on precedents where professionals rendering services abroad were considered eligible for relief under section 35B. The Commissioner (Appeals) analyzed the expenses incurred by the assessee and found them to satisfy the conditions for relief under section 35B. The Commissioner (Appeals) directed the ITO to allow the relief on the specified expenses, totaling to Rs. 23,19,505 and another sum of Rs. 44,682. Issue 2: The department contended that the provisions of section 35B did not apply to the case as the assessee did not export any goods or services, a requirement for relief under section 35B. The department argued that the concept of export implied physical transfer, which was lacking in the case of intangible services. However, the representative for the assessee supported the order of the Commissioner (Appeals) and cited Tribunal decisions where professionals rendering services abroad were considered eligible for relief under section 35B. The representative explained that the expenses were incurred in the process of executing a contract outside India, and the services were sold abroad, satisfying the conditions of section 35B. Judgment: The Tribunal held that the appeal by the department could not succeed. It rejected the argument that the assessee did not export services due to the intangible nature of the services. The Tribunal emphasized that the assessee had sold her professional services to customers abroad, making the income assessable under the head 'Profits and gains of business or profession'. The Tribunal upheld the Commissioner (Appeals)' decision that the assessee was entitled to relief under section 35B. The Tribunal found no errors in the Commissioner (Appeals)' detailed analysis of the expenses and their eligibility for relief under section 35B. The Tribunal concluded that the assessee conducted business, exported services, and upheld the order of the Commissioner (Appeals) to allow relief under section 35B on the specified expenses. In conclusion, the Tribunal dismissed the appeal, affirming the decision of the Commissioner (Appeals) regarding the eligibility of the assessee for weighted deduction under section 35B and the treatment of foreign tour income as business income for the purpose of deduction under section 35B.
|
