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TMI Blog1987 (11) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... Technology, U.S.A. and has had several years of experience in the business of manufacturing and selling staple fibres through his association with companies engaged in similar business and the foreign company, as referred to in the agreement aforesaid, as the " employer " had approached him, i.e., the technician to make available to the " employer " his services in Bangkok on certain terms and conditions, inter alia, that the Thai company would pay to the respondent remuneration of $ 12,000 per annum in quarterly instalments and it would be receivable at Bangkok. The agreement was for a period of three years with liberty to either party to terminate it after six months' notice. It was subject to the approval of the Governments of Thailand and India and other authorities, if any. The respondent applied to the Central Government in India for its approval of his employment with the Thai company under the agreement for the purpose of securing the benefit conferred by section 80RRA of the Income-tax Act, 1961 (hereinafter called " the Act "). On June 8, 1979, the Government informed the respondent that it was unable to approve the employment with the Thai Rayon Co. Ltd., Bangkok, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual who is or was, immediately before undertaking such service, in the employment of the Central Government or any State Government, only if such service is sponsored by the Central Government; (ii) in the case of any other individual, only if he is a technician and the terms and conditions of his service outside India are approved in this behalf by the Central Government or the prescribed authority. Explanation.- For the purposes of this section, (a) 'foreign currency' shall have the meaning assigned to it in the Foreign Exchange Regulation Act, 1973 (46 of 1973); (b) 'foreign employer' means, (i) the Government of a foreign State ; or (ii) a foreign enterprise; or (iii) any association or body established outside India; (c) 'technician' means a person having specialised knowledge and experience in (i) constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power ; or (ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building; or (iii) public administration or industrial or business management; or (iv) accountancy ; or (v) any field of natural or applied science inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices rendered outside India. There is no dispute as to that. The only question that requires consideration in the background of the indisputable facts in this case is whether the sum received by the respondent was from " an employer ", in other words, whether the Thai company was the employer of the respondent. On behalf of the Revenue, it was submitted by Mr. Ahuja that it was only a counterpart of section 10(6)(vii) and that the section should be so considered properly. Mr. Palkhivala, appearing for the respondent, pointed out that the object of section 80RRA of the Act was manifestly to encourage, firstly, earning of foreign exchange by India, secondly, bringing that currency by Indian nationals from abroad to India and, thirdly, to improve the status of the Indians abroad and increasing the market of Indian technicians. It appears to us to be plausible objects in the present socioeconomic context. We find that the amplitude of the expressions " employee " and " employer " covers the cases of a consultant or a technician. We find in the scheme of the section nothing to warrant any exception as contended for by the Revenue. If we read the section with the object of the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from a foreign employee only to the salary received by an employee. In our opinion, employment as a technician for the purpose indicated by Shri Palkhivala could also be an object of the Act and in such a case the fee received by a consultant or a technician would also come within the purview of the section concerned. In Aiyar " The Lexicon ", 1940 edn., at page 387, it has been stated that an employer is one who employs, one who engages or keeps men in service, one who uses or enjoys the service of other persons for pay or salary. The words employer or " employee " are used not in any technical sense. In Chintaman Rao v. State of Madhya Pradesh [1958] SCR 1340, at page 1346 of the report (AIR 1958 SC 388), it was observed that the concept of employment involved three ingredients: (1) employer, (2) employee, and (3) the contract of employment. The employee is one who works for others for hire. The employer is one who employs the services of other persons. In the context of this Act, therefore, the expression " employee " will include a consultant or a technician employed by the foreign company because he would be working for others for hire. It is true that the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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