9911796707
TMI Blog1995 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... Italiviscosa Eastern Trading and Milan (herein after called as " the collaborator company "). The assessee was an employee of the collaborator company and was sent to India at the instance of his employer in Italy to work as chief design engineer at the Indian company. According to the letter containing the terms of employment of the assessee, he was appointed by the technical collaborator as chief design engineer to work with the Indian company for a period of approximately three years--(1095 days). Salary at the rate of 75 dollars per day was to be remitted to the collaborator company by the Indian company. He was entitled to pocket allowance at the rate of Rs. 110 per day free of taxes payable in India. Apart from the aforesaid two sums he was also entitled to a free furnished flat and transport to and from the works. The sums payable and money value of the free flat and transport provided by the Indian company was assessed as income from the salary earned by the assessee during the previous assessment year 1976-77. The assessee contended that the remuneration at the rate of 75 dollars per day payable by the Indian company had neither accrued nor was received in India. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for referring suggested questions of law arising out of the order of the Tribunal for the decision of this court. At the instance of the Commissioner of Income-tax in Reference Application No. 755/Ahd of 1981, the Tribunal referred the following four questions of law arising out of I. T. A. No. 834 of 1980 which form part of the Income-tax Reference No. 285 of 1992 : " 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right to coming to the conclusion that having regard to the provisions of section 16 of the Income-tax Act, 1961, and/or under section 9 of the Income-tax Act, 1961, a sum of Rs. 70,875 and sums of Rs. 7,908 and Rs. 945 were not taxable at the hands of the assessee ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in not deciding whether the assessee was or was not an employee of the firm, Air Control and Chemical Engg. Co. ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in not deciding the question whether the employment of the assessee was a composite contract or contract for a period of not less than 1,095 days ? 4. Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the value of perquisites in the form of free furnished accommodation in Income-tax Reference No. 102 of 1988. The two questions referred to this court for decision by the Tribunal have been decided as under : " It is not necessary to set out the facts involved in this reference in detail as the questions which have been referred to us for our opinion are directly covered by the decision of this court in the case of S. G. Pgnatale [1980] 124 ITR 391. Following the said decision and for the reasons recorded therein, we answer question No. 1 in the affirmative and against the Revenue and question No. 2 in the negative and against the Revenue. Reference answered accordingly with no order as to costs." In view of the aforesaid decision of this court in the assessee's own case, it must be held that the Tribunal was right in coming to the conclusion that having regard to the provisions of section 16 of the Income-tax Act, 1961, Rs. 7,908 and Rs. 945 were not taxable in the hands of assessee. That is to say, question No. 1 at the instance of the Commissioner of Income-tax, is to be answered in the affirmative, in favour of the assessee and against the Revenue. In view of the ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The Tribunal has found that the assessee has not been able to substantiate the claim that the amount is paid in order to meet the excess cost of living which the foreign technician has to incur in India over and above what he would have incurred in Italy. It has also been found that the amount was paid to the assessee even when he is at his headquarters at a fixed rate per day. Therefore, in our opinion, the Tribunal was justified in holding that the amount of pocket allowance which was undoubtedly received by the assessee in India is taxable in his hands. The decision in the case of S. G. Pgnatale [1980] 124 ITR 391 (Guj), in our opinion, is clearly distinguishable on the facts as far as this case is concerned. The facts which were noticed by the court were that under the terms of the agreement, the assessee was paid Rs. 220 per day when posted in Delhi or Rs. 150 per day when posted in Bombay. It was further stipulated under the agreement that in case furnished accommodation for his stay in India was allowed, then the daily allowance was to be reduced. It was by taking into consideration all these terms and the difference in payment of the amount at different places and its ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat accrued to him for his working with the Indian company, in our opinion, is an income from his salary in his hands. He being a non-resident Indian, only income which accrued to, or received by him, in India, as a result of his work in India under the terms of employment with the collaborator company could be taxed under the Income-tax Act under the head of salaries. That being so, the pocket allowance which he received from the Indian company in India while discharging his duties as an employee of the foreign collaborator was income chargeable to tax from salaries and accordingly it will have to be computed under that head. It will also, therefore, be eligible for deductions as are permissible while computing " Income from salary ". We are of the opinion that while the Tribunal was right in holding that the pocket allowance was not paid to the assessee in his capacity as an employee of the Indian company yet it being remuneration forming part of salaries in the hands of the assessee, the Tribunal was not right in holding that standard deduction either of Rs. 3,500 or Rs. 1,000 was not allowable from the aforesaid income as deduction in the hands of the assessee. Accordingly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
