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TMI Blog1994 (11) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... idance of double taxation of income under the Income-tax Act, 1961 ('the Act') and under the corresponding law in force in that country. Article 20 of such Agreement provided as under : " When a resident of a Contracting State derives income which has also suffered tax in the other Contracting State, the first mentioned State shall allow a deduction from its tax on the income of that person equal to the tax in the other Contracting State provided that the deduction shall not exceed that part of the tax as computed before the deduction is given which is applicable to the income taxed in the other Contracting State." 4. The assessee filed the return of his income on 5-3-1990 for assessment year 1988-89 declaring his income at Rs. 61,390 which was computed as under: 1. Salary for the period from 1-4-1987 to 31-1-1988 (From Government of Rajasthan) Rs. 43,607.00 2. Salary for the period from 6-2-1988 to 31-3-1988 : L.D. 1549 x 50 = Rs. 77,450.00 Less: Deduction under section 80RRA = Rs. 38,725.00 Rs. 38,725.00 ------------------------ -------------------------- Rs. 82,332.00 Less: Deduction under section 16(1) Rs. 10,000.00 -------------------------- Rs. 72,332.00 3. S. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief as per rates of tax of the Libyan Government. In his turn the assessee is aggrieved against DC (Appeals)'s applying the provisions of section 91 of the Act while assessee's case squarely fell within the purview of section 90 of the Act and he was entitled to the DTR as per his computation. 8. I heard the learned representative for the parties at sufficient length and went through the material brought on record of the case, and the law applicable thereto. In my opinion the order of the DC (Appeals) calls for modification. 9. Section 80RRA of Chapter VIA of the Act provides for relief, by way of deduction, in respect of remuneration received by an Indian Citizen for services rendered outside India. The deduction allowable under section 80RRA shall be 50 per cent of the remuneration received or 75 per cent if such remuneration is brought into India in accordance with the Foreign Exchange Regulation Act, 1973 and any Rules made thereunder. In any case the period of continuous service outside India should not exceed thirty six months. This restriction has since been withdrawn by Finance Act, 1990 with effect from 1-4-1991. The other conditions laid down under this section are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 90, although not happily worded, provides for relief in respect of the income which suffers charge of income-tax in the foreign country and is also liable to such charge under the Act. In that case the extent of relief to be granted in respect of the income of the assessee would be governed by the agreement which the Central Government might have entered into with the Government of any other country. For the allowability of deduction under section 80RRA it Is not at all necessary that the foreign Income should have suffered charge of income-tax in the foreign country. Deduction contemplated under section 80RRA would be available to an assessee subject to the fulfilment of the conditions laid down therein. An agreement under section 90(a) entered into between the contracting countries cannot adversely affect the right of Indian citizen which has been granted to him by the specific provision of the Statute. Section 90(a) can thus only supplement the relief under section 80RRA. 12. Clause (b) of section 90 speaks of an agreement entered into between the contracting countries for the avoidance of double taxation of the same income under the Act and also under the correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed income'. This view finds support from Rajasthan High Court decisions in CIT v.Dr. J. C. Sharma [1990] 186 ITR 173 and CIT v. Dr.R.N. Jhanji [1990] 185 ITR 586. 14. It may thus be noted that the two sections in Chapter IX of the Act operate in somewhat different fields and contemplate different situations which may have certain elements of similarity but the distinction is clear though both deal with the same subject of Double Taxation Relief. 15. Now coming to the merits of the present case the facts are quite simple and also undisputed. The assessee is a citizen of India and was, immediately before undertaking service outside India in the employment of Rajasthan Government and his such service to Libyan Government was sponsored by the Central Government. The assessee earned salary of Rs. 43,607 for the period from 1-4-1987 to 31-1-1988 from Rajasthan Government and salary amounting to Rs. 77,450 for the period from 6-2-1988 to 31-3-1988 from Libyan Government in foreign currency and such foreign income had suffered income-tax in that country. His gross total income thus included remuneration received in foreign currency. These facts entitled him to relief under section 80RRA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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