TaxTMI 
TaxTMI 
2003 (7) TMI 48
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.... justice. The respondents have entered appearance. They oppose the prayers. Writ Petitions Nos. 23605-606 of 2001 are filed by Sri B.K. Sinha seeking for a writ of certiorari to quash annexure C, dated August 17, 2000 and annexure E, dated February 19, 2001. Italab (Japan) Ltd., entered into an agreement with the petitioner in the matter of availing of the services of the petitioner in the light of his expertise in the international market. An application was filed seeking for approval under section 80RRA(2)(ii) of the Income-tax Act. It was rejected in terms of annexure C. A representation was made in terms of annexure D. The same was rejected in terms of annexure E. The reason for rejection is that "no visits abroad for rendering services outside India are envisaged in the agreement" The respondents have entered appearance. A detailed counter is filed. They say that the benefit in terms of section 80RRA is available only in the event of a physical outside service by a technocrat or a technician. Sri Sarangan, learned senior counsel and Sri K.R. Prasad, learned senior counsel appear for the petitioners. They took me through the pleadings to contend that a case is made out for ....
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....ere shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the individual, a deduction from such remuneration of an amount equal to 75 per cent. of such remuneration, as is brought into India by or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf." A combined reading of all these provisions would show that deduction is permissible in certain circumstances. Section 80-O(iii), Explanation provides that services rendered or agreed to be rendered outside India shall include services rendered from India but shall not include services rendered in India. This would mean that service outside India cannot take into its compass the service rendered in India. In the case of professors under section 80R, deduction is permissible in the event of service being rendered during the stay outside India. In the case of professional income in respect of artists, etc., deduction is permissible out of the income derived by them from the Government of a foreign state, etc. In so far as s....
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....d the Supreme Court also ruled that: "Mr. Palkhivala, appearing for the respondent, pointed out that the object of section 80RRA of the Act was manifestly to encourage, firstly, earning of foreign exchange by India, secondly, bringing that currency by Indian nationals from abroad to India and thirdly, to improve the status of the Indians abroad and increasing the market of Indian technicians. It appears to us to be plausible objects in the present socio-economic context." The Delhi High Court in the case of C.S. Mathur v. CBDT has considered this provision in the judgment reported in [1999] 235 ITR 769. That was a case of a chartered accountant being engaged in providing professional services to foreign clients. An application was made and the said application was allowed in the light of Aditya V. Birla's case [1988] 170 ITR 137 (SC). The Delhi High Court ruled as under: "Section 80-O as it originally stood, underwent a change by the Finance (No. 2) Act of 1991 (with effect from April 1, 1992). The provision which applied earlier to an Indian company only was extended in its application to non-corporate taxpayer residents in India. The concession became available in relation to p....
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....RRA carefully, it is seen that the section does not require rendering of any service outside India as a technician. What it requires, inter alia, is that the services must be rendered outside India and the person who renders such services is a technician within the meaning assigned to it in Explanation (c) thereto...." The Delhi High Court in the case of Mahendra Raj v. Joint Secretary, Government of India [2002] 257 ITR 569 has noticed Aditya V. Birla's case [1988] 170 ITR 137 (SC) and thereafter ruled as under: "On a bare perusal of the section, it will be clear that the petitioner fell within its contemplation. What had obviously escaped the attention of the respondents, and had resulted in their erroneous interpretation of the section, was the absence of the use of the words 'employee' and/or 'salary'. The wording of the section, as also its palpable purpose, i.e., attracting the repatriation of funds/remunerations earned by Indian citizens abroad and thereby augmenting our foreign currency holding, make it abundantly clear that the incentive is neither restricted to the remittance of salaries alone, nor to the cases of employees only. Had this been the intendment, these word....