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2014 (2) TMI 895
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....same as income of the year. A.O. found that assessee was not regularly employed abroad, but worked as a consultant for a foreign company. Assessee continued to render technical services in India and earned income in India too. Assessee claimed non-resident status, stating that he was required to travel abroad in connection with providing his consultancy services to the foreign company. However, the A.O. held that assessee was unable to establish the nexus between his travels abroad and the consultancy services rendered by him to the foreign company. The A.O. held that the term 'for the purposes of employment' used in the section is to be interpreted in the context of employer - employee relationship and should be given a restrictive meaning. The A.O. held, after considering the terms of the offer letter to assessee, that there was no employer - employee relationship between assessee and the foreign company. The A.O. therefore, held that assessee was covered by section 6 of the Act and was resident as per that section. A.O. therefore held that the amount received by assessee as consultancy charges from the foreign company had to be brought to tax as the income of assessee for the ye....
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....at head of income. There is no warrant to limit the explanation to salaried employees in the light of the Board Circular referred to supra. (iv) In this regard, assessee also relies on the decision of the Supreme Court in the case of CBDT Vis. Aditya Vis. Birla (170 ITR 137). That was a case where assessee claimed relief in terms of Section 80RRA. The Supreme Court held that the word 'employed' is used in Section 80RRA not in any technical sense but as meaning a person who uses of employs the services of another person and the word 'employee' means the use of services of any person ". Assessee also preferred alternate grounds of appeal relating to the claim for deduction under section 80RRA of the Act. These were (1) the Assessing Officer erred in not considering the appellant's claim for deduction under section 80RRA of the Act. (2) The Assessing Officer erred in not giving the appellant an opportunity to file the certificate under section 80RRA. (3) Assessing Officer erred in not allowing the deduction under section 80RRA on the hyper-technical ground that the claim was not made in the return. (4) the Assessing Officer has a duty to allow all such d....
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.... these two countries is excluded, the appellant fails to satisfy the conditions laid down in section 6 of the Act, to be considered a non-resident". 6. As assessee made alternate claim for deduction under section 80RRA which was made before the Assessing Officer, the learned CIT(A) granted deduction under section 80RRA, as CBDT has already permitted the terms of agreement and further held that not filing requisite certificate is not fatal to the claim made. Therefore, assessee was allowed deduction under section 80RRA on the amount of income received. 7. Assessee is aggrieved on the treatment given to the status of assessee. The learned Counsel reiterated the facts and made various alternate submissions. The detailed submissions given also in writing are as under: "2. It is submitted that neither the interpretation placed by the AO nor that by the learned CIT(A) is correct as elaborated in the following paragraphs. 3. The AO has gone on a long voyage of principles of interpretation to hold that assessee is not covered by explanation (a) to Sec. 6 as claimed. The Supreme Court in the case of CBDT v. Aditya V. Birla (170 I....
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....p; Having held so she went on to assume that the trips to Saudi Arabia only are to be considered and that those trips were only for short durations. In assuming so she has omitted to consider the facts placed before her viz. that the work for Thinet International involved visits to several countries, that that concern financed all the visits as confirmed in writing and that assessee also stated so in his letter to the learned CIT(A). She has also not given any -weight to the letter of Thinet International appointing assessee as consultant (copies in PB at 4-5 & 8). It is most humbly submitted that the interpretation of the expression "leave for purposes of employment" placed by the learned CIT(A) on Sec 6(1) and explanation is not correct. Her conclusion that assessee did not leave for purpose of employment at all is also not correct because the facts presented to her have been omitted to be considered. 6. The learned CIT(A) then went on to debunk the facts of leaving for employment on the ground that assessee did not prove as to what services were provided to Thinet International during each of the travels undertaken by him. The facts ....
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....es for 190 days which is the total period outside India including travels to Dusseldorf and Khartoum. She did not either notice or consider this part of the statement at all. The CIT(A) is not justified in disbelieving the statement of assessee only because Thinet International did not refer to the expenses to these two places, although the letter clearly stated the period of 190 days which as stated above includes trips to Dusseldorf and Khartoum. 10. It is submitted that the method adopted for calculating the period of stay in India as above is also not correct. Firstly stay in Dusseldorf and Khartoum cannot be included as period of stay in India. Assessee has gone to those places from Dubai. Assessee left India on 15-10-2001 for purpose of employment. His travels to Dusseldorf and Khartoum from there cannot be considered as period of stay in India. Once assessee left India for purpose of employment, there is no provision for deeming some visits from the place of employment to other places as stay in India. The section speaks of "In India for 182 days" and does not speak of the computation of the period for purposes of employment and then derive the pe....
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....e of both days of arrival & departure Total 10 days According to assessee Period of stay outside India assuming but not admitting that trips to Dusseldorf & Khartoum were not for employment purposes Dusseldorf 17-10-2001 to 22-10-2001 4 days 23-10-2001 to 26-10-2001 2 days 6 days Assessee's calculation is in accordance with the principle (adopted by the Dept) of including both the days of departu....
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....DT v. Aditya Birla 170 ITR 137 considered that employment does not mean salaried employment but also includes self-employed/professional work. Similar view was also expressed by the decision of the Kerala High Court in the case of CIT v. Abdul Razak 337 ITR 267 wherein it has been held that for the purpose of explanation to the section 'employment includes self-employment like business or profession taken-up by assessee abroad'. Therefore, considering the decisions on the above issue and also Circular No.346 of the CBDT, assessee's earning for consultancy fees from foreign enterprise and visit abroad for rendering consultation can be considered for the purpose of examining whether assessee's is resident or not. The Assessing Officer has calculated the period of stay in one particular manner which the learned CIT(A) examined and determined in another manner by excluding the travel to two places which are not supported by evidence to consider for the purposes of employment. 12. In the case of CIT v. Abdul Razak (supra) the Hon'ble Kerala High Court has considered the issue and held as under: "What is clear from the above is that no technical meaning is ....