2009 (7) TMI 910 - AT - Income Tax

Summary

Issues Involved:
1. Exemption u/s 10(5B) of the Income-tax Act.
2. Reduction of addition on account of reimbursement of living expenses.

Summary:

Issue 1: Exemption u/s 10(5B) of the Income-tax Act

The revenue appealed against the CIT(A)'s order allowing an exemption of Rs. 20,66,400 u/s 10(5B) of the Income-tax Act. The Tribunal initially dismissed the appeal, granting the exemption, but the High Court remitted the matter back for fresh consideration of whether the assessee qualified as a "technician" u/s 10(5B). The assessee, employed by M/s. Rieter India (P.) Ltd., claimed exemption based on his specialized knowledge and experience in textile technology. The Assessing Officer (AO) rejected the claim due to lack of documentary evidence of technical qualifications. However, the CIT(A) accepted the assessee's bio-data, affidavit, and job responsibilities as sufficient proof of his technical expertise, granting the exemption. The Tribunal, upon review, upheld the CIT(A)'s decision, noting that specialized knowledge and experience could be demonstrated through circumstantial evidence and practical experience, not necessarily through formal certificates.

Issue 2: Reduction of Addition on Account of Reimbursement of Living Expenses

The revenue also contested the CIT(A)'s reduction of the AO's addition from Rs. 2 lakhs to Rs. 20,000 on account of reimbursement of living expenses. The Tribunal did not find any specific discussion or detailed reasoning in the provided text regarding this issue, implying that the primary focus was on the exemption u/s 10(5B).

Conclusion:

The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s decision to grant the exemption u/s 10(5B) and reduce the addition on account of living expenses reimbursement. The Tribunal emphasized the practical demonstration of technical expertise over formal qualifications in determining eligibility for the exemption.