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TMI Blog2008 (8) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... ome was earned. The assessee while filing its return of income had claimed deduction under s. 80-O of the IT Act for an amount of Rs. 60,27,375 being 50 per cent of Rs. 1,20,54,750, which is the consultancy fees received from abroad. The AO, in his order under s. 143(3) allowed only 50 per cent of the net receipts as relief under s. 80-O. The order under s. 143(3) was passed on 25th Jan., 1999. The assessee carried the matter in appeal. The first appellate authority vide his order dt. 24th July, 2000 dismissed the assessee's appeal by applying the Special Bench decision of the Mumbai Tribunal in the case of Petroleum India International vs. Dy. CIT (1999) 65 TTJ (Mumbai)(SB) 671 : (1999) 71 ITD 31 (Mumbai)(SB). He held that while calculatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e directions of the CIT(A) for allowing credit of TDS suffered in Thailand in terms of art. 23 of the DTAA, the Revenue is in appeal. 4. The assessee in its appeal mainly raises two grounds, the first challenging the reopening under s. 147 of the Act; and the second against upholding of the order of the AO on the issue of restricting relief under s. 80-O only to the amount of foreign exchange remitted to India. The Revenue has raised only one ground that the CIT(A) erred in granting relief to the assessee on account of enhanced credit for avoidance of double taxation without considering the proper import of art. 23 of the agreement for avoidance of double taxation and prevention of fiscal evasion entered into by Government of India and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, being an Indian company or a person other than a company who is resident in India, includes any income received by the assessee from the Government of a foreign State or foreign enterprise in consideration for the use outside India of any patent, invention, design or registered trade mark and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange, there shall be allowed, in accordance with and subject to the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wordings of s. 80-O is different and these wordings were not those which have been considered by the jurisdictional High Court. In fact, the jurisdictional High Court relied on another decision in the case of Mrs. Meherbai N. Sethna vs. CIT (1995) 123 CTR (Bom) 420 : (1994) 209 ITR 453 (Bom). In this case, the jurisdictional High Court held that notwithstanding the restrictions imposed by the foreign company on remittances, the whole of the dividend and interest which accrued to the assessee during the relevant previous year in Ceylon was liable to be assessed in her hand for the assessment year in question. The accrual of income outside India was considered as the only relevant factor. The learned counsel also relied on the judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the claim on behalf of the taxpayer revolves on the income in question being included in gross total income and such income should be received in convertible foreign exchange. It does not mean that the Special Bench has held that receipt of money in convertible foreign exchange is not necessary criteria for granting deduction under s. 80-O. Thus, for these reasons, we are unable to agree with the arguments of the learned counsel for the assessee. The appeal of the assessee is dismissed. 6. Coming to the Revenue's appeal we find that cl. (2) of art. 23 in Chapter IV of the Agreement for Avoidance of Double Taxation of Income and Prevention of Fiscal Evasion with Thailand entered into between the Government of India and the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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