1984 (2) TMI 178 - AT - Income Tax

Summary

Issues:
- Assessment of foreign income for a specific period
- Claiming exemption based on maintaining separate accounts for foreign income
- Disagreement between assessee and ITO on previous year selection for salary income
- Applicability of relevant legal precedents in determining previous year for income assessment

Analysis:
The appeal before the Appellate Tribunal ITAT HYDERABAD-A involved the assessment of foreign income amounting to Rs. 15,997 received by the assessee from a foreign company for a specific period. The assessee claimed exemption for this income based on maintaining separate accounts for foreign income, arguing that it should be assessed for a different year. The Income Tax Officer (ITO) disagreed, stating that the source of income (salary) was the same for both Indian and foreign incomes, unlike the case cited by the assessee involving different sources of income. The ITO included the foreign salary in the total income but provided relief under section 80RRA.

Upon appeal, the Appellate Authority Commissioner (AAC) upheld the ITO's decision, leading the assessee to challenge the order before the Tribunal. During the proceedings, the assessee relied on legal precedents, specifically citing a case from the Andhra Pradesh High Court, to support their argument for choosing a different previous year for income assessment. The Andhra Pradesh High Court case involved a situation where an assessee, practicing as an advocate, elected a different previous year for salary income as a judge, which was deemed acceptable under the Income Tax Act.

Additionally, the assessee referenced a previous Tribunal decision where an individual, upon taking up a job in a foreign country, was allowed to choose a different previous year for income earned abroad. Considering these legal precedents and the circumstances of the case, the Tribunal concluded that the assessee had the right to elect a different previous year for assessing income earned in the foreign country. As a result, the Tribunal directed the ITO to exclude the foreign salary income for the specified period from the assessment.

In light of the legal arguments and precedents presented, the Tribunal allowed the appeal filed by the assessee, emphasizing the assessee's ability to choose a different previous year for income assessment under the Income Tax Act.