9911796707
TMI Blog1988 (8) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of Rs. 16,413 in the foreign country ?" The relevant assessment year is 1976-77. During the relevant period, the assessee, a medical practitioner had received salary in Iran of Rs. 1,41,265 on which the tax deducted at source in Iran was Rs. 16,413. The assessee also earned an income of Rs. 5,247 in India during the same year. The assessee claimed deduction under section 80RRA of the Act in respect of the remuneration received by him for services rendered outside India and also relief from double taxation under section 91(1) of the Act. The Income-tax Officer held that the relief under section 91(1) was allow able only on the amount of tax paid on Rs. 70,632 which was 50 per cent. of the remuneration received for services rendered outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee in computing the total income on which the assessee was required to pay tax in India under the Act. The controversy is only about the construction of section 91 (1). According to the assessee, he is entitled to relief under section 91(1) from double taxation of the total amount of tax amounting to Rs. 16,413 paid by him in the foreign country on the total foreign income of Rs. 1,41,265 notwithstanding the fact that only 50 per cent. of the foreign income amounting to Rs.70,632 has been included in computing the total income for the purpose of payment of tax in India. On the other hand, the Revenue contends that since Rs. 70,632 only being 50 per cent. of the total foreign income has been included in computing the total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry, whichever is the lower, or at the Indian rate of tax if both the rates are equal." Section 80RRA says that "in computing the total income of the individual", a deduction equal to 50 per cent. of the foreign income shall be given. Thus, the "total income" computed under the Act includes only 50 per cent. of the foreign income by virtue of the deduction granted under section 80RRA. As earlier stated, there is no controversy about the meaning or effect of section 80RRA and a deduction of an amount equal to 50 per cent. of the foreign income has been given "in computing the total income of the individual". Now comes for consideration the disputed meaning of section 91 (1) which admittedly applies in the present case. This provision prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of giving relief from double taxation. In other words, that part of the foreign income on which deduction is given under section 80RRA "in computing the total income of the individual" for the purpose of determining the Indian income-tax payable cannot be said to be taxed once again in India in order to qualify for the relief from double taxation. This appears to be the logical construction of section 91 (1 ) which is also in consonance with the object of its enactment. If the assessee's contention is accepted, then the assessee would be given relief not only in respect of the amount which has been taxed twice but also in respect of the amount which has been taxed once only in the foreign country and not also in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be included in computing the "total income" and, therefore, the tax paid on the total foreign income in the foreign country and not merely that on 50 per cent. of that amount qualified for relief from double taxation under section 91 (1). Reliance has been placed by learned counsel for the assessee on the Supreme Court decision in K. V. AL. M. Ramanathan Chettiar v. CIT [1973] 88 ITR 169 in support of this submission. In our opinion, this contention of learned counsel for the assessee cannot be accepted. We shall first refer to the Supreme Court decision in K. V. AL. M. Ramanathan Chettiar's case [1973] 88 ITR 169, which is the sheet anchor of the argument of learned counsel for the assessee. This decision was rendered in relation to sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tart business in the foreign country and to give full relief at the Indian rate of tax or the rate of tax of the foreign country, whichever was lower. Under the 1922 Act, no such deduction was given as is provided in section 80RRA of the 1961 Act in computing the "total income", and, therefore, the total foreign income was taxed in India also. This Supreme Court decision does not support the assessee's contention in the present case. The consequence of the construction we have made of section 91(1) is that the entire foreign income which is actually taxed in India being included in computing the "total income" is only 50 per cent. of the total foreign income by virtue of the deduction given under section 80RRA. This entire amount which alo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
