9911796707
TMI Blog1988 (2) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... less than the taxable limit, i.e., Rs. 7,500, no tax was paid by him on his income earned outside India. 2. From the facts available before us, it would appear that the assessee entered into a contract of service with M/s. Iraqi State Enterprises for Maritime Transport on 30-7-1979. The period of contract was not to exceed one year unless extended for the completion of the ship's voyage to Iraq. The contract was to commence from 3-9-1979 and was to expire on the date the employee signed off. The employee's monthly salary was fixed at 1,300 US Dollar and this included overtime, extra work dangerous cargo, allowances, etc. The employer was to retain 50 per cent of one month's salary of the employee as a deposit which was to be refunded to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CIT (Appeals), neither leave nor vacation as understood within the meaning of Explanation to sec. 6(1) of the IT Act. In this view of the matter, the CIT (Appeals) confirmed the order of the ITO and, hence, this appeal. 3. Shri V.B. Patwardhan, Advocate, who appeared for the assessee, argued that Explanation to sec. 6(1) only says that the assessee should be rendering services outside India. It does not say that the person must be employed outside India at the time of enjoyment of his leave or vacation in India. The assessee came to India on 8-1-1980 and returned to the employment outside India on 16-4-1980. The conditions laid down in sec. 6(1) and the Explanation thereto are satisfied if a person takes up employment outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds a specified period. As this results in avoidable hardship and discourages such persons from spending even a reasonable period on vacation in their home country, I propose to provide that Indian citizens employed outside India may stay on vacation in the country for 89 days in a year without attracting such tax liability." He interpreted these observations to mean that the relief contemplated in the Minister's speech would be available to the Indian citizens outside India only if they were on vacation and vacation could only be granted if they were in employment. Since in the present case the assessee had changed employment and had joined a new company on termination of his stay in India, such stay could not be treated as leave or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in India has to be treated as period on leave. Secondly, the words "leave" and "vacation" have distinct connotations. Whereas "leave" involves taking permission of a superior authority before remaining absent from duty, "vacation" would indicate that no such permission is required to be taken. It would thus mean cessation of work for the purpose of relaxation, Chamber's Twentieth Century Dictionary describes "leave", inter alia, to mean "permitted absence from duty : time of this, holidays". It describes "vacation", inter alia, as "holidays, especially of schools, colleges, law courts ; leisure ; intermission". Thus, whereas for leave certain degree of prior consent from the employer is implied, "vacation" can mean voluntary c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been set at rest by subsequent amendment which came with effect from 1-4-1983 and which used the word 'visit' in place of 'leave or vacation'. If the interpretation put on the assessee's stay in India by the departmental authorities is accepted, it would be impossible for officers of this type who changed employment from one employer to another and who take employment on a contract basis to get the benefit of sec. 6(1). We are, therefore, satisfied that the order of CIT (Appeals) requires to be reversed. The assessee is entitled to succeed. His income earned abroad will not be subjected to tax in view of the provisions of sec. 6(1) of the Act read with the Explanation thereof. 7. The appeal is allowed. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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