2004 (7) TMI 66

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....nsideration executed contracts in India. During the year under consideration, the respondent was in employment of this company and thus derived income from "salaries" from it. The questions raised before us are as follows: Questions: "1. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was legally correct to hold that the salary paid to the assessee for the off period outside India was not chargeable to the Indian Income-tax Act in terms of section 9(1)(ii) of the Income-tax Act, 1961, whereas the learned Income-tax Appellate Tribunal has itself held, vide order dated March 25, 1992, in I.T.A. No. 5649/Delhi of 1992, dated July 28, 1999, in I.T.A. No. 1079/Delhi of 1991, dated January 24, 2000,....

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....ch accrues or which is deemed to accrue to him during such year. Section 9(1)(ii), inter alia, lays down that income which falls under the head "Salaries", if it is earned in India, shall be deemed to accrue to the non-resident during such year. Therefore, section 9 is a deeming section. It brings in certain types of incomes, which may not come under section 5, into the definition of "total income" under section 2(45). Section 9(1)(ii) read with the Explanation provides for an artificial place of accrual for income taxable under the head "Salaries". It enacts that income chargeable under the head "Salaries" is deemed to accrue in India if it is earned in India, i.e., if the services under the contract of employment are rendered in India.....

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....o remain fit during the rest period. Hence, he had to undergo demonstrations and training but all that has a nexus with the services which he had to render in India. Hence the payment which he received was for his services in India. In this connection it may be noted that the Explanation to section 9(1)(ii) introduced by the Finance Act of 1983 refers to what constitutes "income earned in India". This Explanation was introduced by the Finance Act of 1983 with effect from April 1,1979, to get over the judgment of the Gujarat High Court in CIT v. S.G. Pgnatale [1980] 124 ITR 391 in which it was held that in order to attract section 9(1)(ii) of the Act, liability to pay must arise in India. By the said Explanation, the original intention under....

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....rduous and continuous. Under such circumstances free food and beverages is a necessity. It is not a luxury. It is not a perquisite. Its value cannot be added to the income of the assessee. The reasoning regarding question No. 3 is as under: It is important to note that section 234B imposes interest, which is compensatory in nature and not as a penalty. Secondly, although section 191 of the Act is not overridden by sections 192, 208 and 209(1)(a) and (d) of the Act, the scheme of sections 208 and 209 of the Act indicates that in order to compute advance tax the assessee has to, inter alia, estimate his current income and calculate the tax on such income by applying the rates in force. That under section 209(1)(d) the income-tax calcula....