2007 (8) TMI 495

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....r section 10(5B)." 3. The assessee, a British citizen, was an employee of Scott Wilson Kirk Patrick and Company Limited, UK (hereinafter referred to as 'the employer') and commenced his Indian assignment with the employer on 24-7-2001 to function as Team Leader on the Tamil Nadu TNI Contract Supervision Project. In respect of the services rendered while on deputation to India, the assessee received salary and allowances outside India from the employer. Further the assessee was also provided with local benefits in India. As per the terms of the Overseas Employment Contract between the assessee and Scott Wilson Kirk Patrick & Co. Ltd., the employer in India was responsible for local Indian tax while the assessee is in employment with the e....

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....rnment by the employer which tax in the case of an employer, being a company, may be paid notwithstanding anything contained in section 200 of the Companies Act, 1956, the tax so paid by the employer for a period not exceeding forty eight months commencing from the date of his arrival in India. . . . Explanation.-For the purposes of this clause, 'technician' means a person having specialized knowledge and experience in- (i )Construction or manufacturing operations, or any mining or in the generation of electricity or any other form of power, or (ii )Agriculture, animal husbandry, dairy farming, deep sea fishing or ship building, or (iii)Such other field as the Central Government may, having regard to the availability of Indians ....

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....ed taxable income of the assessee holding that the tax paid by the employer in India had to be grossed up, as follows : Income as per return of income   Rs. 27,91,760 Income after the gross up : 27,91,760 x 100     100 - Tax   = 2791760 x 100 = 40,22,710 100-30.6 Total income :   Rs. 40,22,710 6. On appeal by the assessee, the CIT(A) held that the taxes paid by the employer in India should not be grossed up, since the tax so paid does not form part of the total income of the assessee in view of the provisions of section 10(5B) of the Act. The CIT(A) also held that the conditions to be fulfilled for application of section 10(5B) of the Act were satisfied in the case ....