1983 (11) TMI 120

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....nce of Rs. 68,162 as made by the ITO (ITO for short), out of the remuneration paid to Mr. A.J.G. Ellis, who was an employee director of the assessee and was also an approved foreign technician under s. 10(6)(vii) of the IT. Act. 2. The ITO disallowed the claim of the assessee under s. 40(c). According to the assessee, s. 40A(5)b(ii) provides that there should be no disallowance in respect of th....

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.... whose services were approved by the Govt. of India and was qualified for exemption under s. 10(6)(vii).According to the assessee, the provision of s. 40A(5) would be applicable and, therefore, the ITO was not justified in add in back the above sum. The assessee relied on the decision in the case of M/s Graphite India Ltd. as decided by the Appellate Tribunal, 'E' Bench. Calcutta in ITA Nos. 1285 ....

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..... Ltd. (1979) 119 ITR 431 (Cal), would not be applicable, as s. 40(c) would be applicable. Accordingly the CIT (A) found that the ITO was justified in making the above disallowance. Hence these appeals before us. 4. The assessee's ld. counsel argues at length to stress the point of difference between ss. 40(c) and 40A(5), similar to those submissions made on behalf of M/s Graphite India Ltd. In....

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....40(c) and 40A(5). It is seen that the Appellate Tribunal in the case of M/s Graphite India. Ltd. has elaborately discussed the implications involved in both the sections and came to the conclusion that the remuneration paid to the foreign technician was entitled to exemption under s. 10(6)(vii) and consequently the entire amount was allowable and cannot be restricted to Rs. 72,000 as has been done....