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TMI Blog2012 (5) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ons - no infirmity in the order of CIT(A) allowing the benefit of deduction u/s 80G - against revenue. - IT Appeal Nos. 2190 (AHD.) of 2009 - - - Dated:- 4-5-2012 - G.C. GUPTA, ANIL CHATURVEDI, JJ. ORDER Anil Chaturvedi, Accountant Member These two appeals filed by the Revenue are directed against the order of the learned CIT(A)-XXI, Ahmedabad dated 25.4.2009 for AY 2005-06 and AY 2006-07 respectively. Since the facts and issues involved are identical for both the assessment years and the appeals have been heard together, these are being disposed of by a single order for the sake of convenience. The 1st ground for both the assessment years relate to allowance of full exemption of salary under DTAA u/s 90 to the assessee for the salary received from foreign company. 2. The assessee is an individual and he filed his return of income on 30-3-2006 declaring total income of Rs. 1,20,540/-. Return of income was processed u/s. 143(1)(a). Assessee claimed salary of Rs. 10,86,950/- received from Pharmaceutical work POI Pharma S.A. in Poland being exempt from Tax on the basis of DTAA entered into between the Government of Poland and Government of India. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are not applicable to the assessee's case. The real income is required to be taxed has already been accepted by various Courts. In view of the above, salary income received by the assessee from Pharmaceutical works Polpharma S.A. is added to the total income of the assessee. Penalty proceedings u/s. 271(1)(c) are being initiated for furnishing inaccurate particulars of income. 3. Aggrieved by the AO's order, assessee went in appeal before the CIT(A). CIT(A) vide order dated 25-4-2009, accepted the assessee's plea and granted relief to the assessee by holding as under:- "In order to decide the issue, I have carefully considered the various arguments of the Ld. AR including the DTAA between India Poland, C.B.D.T. Circular, case laws cited etc. The appellant has claimed Double Taxation Relief after taking the opinion of Gujarat High Court Advocate Mr. Udayan P. Vyas and the opinion is clear and free from debate. The appellant-assessee has worked as Top Official Employee in the category of Top Managerial Position which has been proved by his conduct in the office of Poland Company at Bangalore in India. Since, he was the final authority at Bangalore based Indian Office a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her stated that the assessee was the Highest authority at India in respect of the Poland Company. He also relied on the opinion of the Advocates Mr. Udayan Vyas according to which the assessee falls within article 17(2) of DTAA and accordingly the assessee was entitled to benefit. He also relied on the Certificate from Polish Co which states that the assessee is an official in a top official employee. He further stated that the assessee enjoyed wide managerial powers which goes to show that the assessee was highest authority at Indian office of Poland Company. 9. During the course of hearing the Ld. A.R. has furnished additional evidence with a request to take the same on record. The submission made by it vide letter dated 22.9.2011 is as under: "Reason for Non submission before AO and CIT(A): (1) At the time of assessment proceedings, the assessee requested the Poland Company to issue certificate of the assessee as an official in a top level managerial position but the Poland authorities replied that they have already issued a certificate on 25.8.2005 mentioning the words "top official employee" and that certificate is sufficient. Then the assessee was continuously reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as Business Development Director at Bangalore in India. The Assessee received gross salary of US $ 24,093 (equivalent to Rs. 10,86,950/-) in AY 2005-06 and US $ 18,836 (equivalent to Rs. 8,15,795) in AY 2006-07. The Assessee has furnished certificate dated 25th August 2005 issued by Polpharma and which is placed at page 98 of the paper book which certifies that the Assessee has been appointed by the company as "Service Provider" whose category in the set up of the organization falls under the Top official Employee. The Assessee has also placed at page 108 of the Paper book the co-operation agreement dated 14.12.2004 concluded between the Assessee and Zaklady Farmaceutyezne Polpharma SA. According to this agreement, the assessee has been referred to as "Service provider" and he shall support establishing and preparing organization of the Company's representative office at Bangalore by 31st May 2005. The Assessee has also placed on page 134 of the Paper Book, certificate dated 14.6.2006 issued by polpharma certifying the salary paid to the assessee. It also states that the assessee is providing service to the company as "service provider" and the salary paid to the assessee. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iveness." 16. Viewed in light of the above definition, the assessee cannot be considered to be of a Top Level Managerial position. Further the A.O. has given a finding that the Assessee has made only two short visits to Poland. This finding has not been controverted by the Assessee. The assessee has been functioning from India and therefore the income is deemed to accrue and arise in India. In view of the aforesaid facts, we are of the view that the order of the CIT (A) needs to be set aside on this issue and that of the A.O. be upheld. Thus the ground No. 1 for A.Y. 2005-06 and 2006-07 of the Revenue's appeal are allowed. 17. The second ground taken in appeal in ITA No 2190 for AY 2005- 06 is as under: 2. The Ld. CIT (A) has erred in law and on facts in allowing deduction u/s. 80G of the Act of Rs. 1,00,000/-made in cash." 18. The facts are that the assessee had made donation of Rs. 20,000/- each on 10-4-2004, 2-5-2004, 12-7-2004, 20-11-2004 and 15-12-2004 to Shree Mahavir Research Foundation by cash. The assessee was asked to justify the donation with reference to cash withdrawals made. The assessee vide letter dated 19-12-2008 submitted that he made cash withdrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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