9911796707
|
Home
Issues:
Disallowance of remuneration paid to a foreign technician under s. 10(6)(vii) of the IT Act - Applicability of s. 40(c) and s. 40A(5) - Interpretation of relevant legal provisions - Comparison with precedent cases. Analysis: The appeal by the assessee contested the disallowance of Rs. 68,162 made by the ITO regarding the remuneration paid to a foreign technician who was also a director of the assessee. The ITO disallowed the claim under s. 40(c) stating that the director's case was covered by this section. The assessee argued that s. 40A(5)(b)(ii) exempts disallowance for remuneration to a foreign technician under s. 10(6)(vii). The CIT (A) upheld the disallowance, citing the director's status and applicability of s. 40(c) and the first proviso to s. 40A(5)(a). The CIT (A) rejected the assessee's reliance on a precedent case and held that s. 40(c) applied in this scenario, justifying the ITO's disallowance. The assessee contended before the CIT (A) that s. 40(c) was wrongly applied, emphasizing the exemption under s. 10(6)(vii) for the foreign technician's remuneration. The CIT (A) rejected the assessee's argument, stating that s. 40(c) applied due to the director's status. The assessee's counsel highlighted the distinction between s. 40(c) and s. 40A(5), drawing parallels with a previous case. The Tribunal considered the precedent case and the provisions of s. 40(c) and 40A(5), determining that the foreign technician's remuneration was exempt under s. 10(6)(vii) and should not be restricted to Rs. 72,000. The Tribunal found the present case akin to the precedent case, ruling in favor of the assessee and partially allowing the appeal. The Tribunal's decision was based on a comparison with the precedent case where it was established that the remuneration paid to the foreign technician should be exempt under s. 10(6)(vii). The Tribunal concluded that the facts of the present case aligned with the precedent case, warranting allowance of the claim. The Tribunal's analysis of ss. 40(c) and 40A(5) led to the decision in favor of the assessee, emphasizing the exemption under s. 10(6)(vii) for the foreign technician's remuneration. Consequently, the appeal by the assessee was partly allowed, overturning the disallowance made by the Revenue Authorities based on the interpretation of relevant legal provisions and comparison with precedent cases.
|
