ITO, Ward - 27(4), Kolkata, Kolkata V. Shri Soumendra Prasad Dash, Kolkata

ITA 1218/KOL/2010

• Counselvise Citation: 121823514 RSA 2010
• Duration Of Justice: 3 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 14-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: P DEY
• Keywords: Double taxation relief
• Section: 10(14); 234B

Judgement Text

I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1218/KOL. / 2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER,.................. ...APPELLANT WARD-27(4), KOLKATA, 169, AJC BOSE ROAD, KOLKATA-700 014 -VS.- SHRI SOUMENDRA PRASAD DASH,...................... ...RESPONDENT THE CONDOVILLA BENGAL AMBUJA, NEW TOWN, KOLKATA-700 156 [PAN : ACMPD 2845 G] & C.O. NO. 111/KOL/2013 (ARISING OUT OF ITA NO. 1218/KOL/2010) ASSESSMENT YEAR : 2006-2007 SHRI SOUMENDRA PRASAD DASH,...................... ...CROSS OBJECTOR THE CONDOVILLA BENGAL AMBUJA, NEW TOWN, KOLKATA-700 156 -VS._ INCOME TAX OFFICER,.................. ...RESPONDENT WARD-27(4), KOLKATA 169, AJC BOSE ROAD, KOLKATA-700 014 & I.T.A. NO. 1216/KOL/2010 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,.................. ...APPELLANT WARD-27(4), KOLKATA, 169, AJC BOSE ROAD, KOLKATA-700 014 -VS.- SHRI SOUMEN SAMANTA,............................. .......RESPONDENT 3/2, RAMLAL DUTTA LANE, BHADRAKALI, HOOGHLY-712 232 [PAN : AKKPS 8993A] & I.T.A. NO. 1219/KOL/2010 ASSESSMENT YEAR : 2006-2007 I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 2 OF 11 INCOME TAX OFFICER,.................. ...APPELLANT WARD-27(4), KOLKATA, 169, AJC BOSE ROAD, KOLKATA-700 014 -VS.- SMT. SUDARSHANA THAKURTA,........................ ......RESPONDENT 1, AVENUE EAST, MODERN PARK, KOLKATA-700 075 [PAN : ADGPT 1801 R] & I.T.A. NO. 1224/KOL/2010 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,.................. ...APPELLANT WARD-27(4), KOLKATA, 169, AJC BOSE ROAD, KOLKATA-700 014 -VS.- SHRI SOUVIK CHATTERJEE,.......................... ..........RESPONDENT 46/11-1, BECHARAM CHATTERJEE ROAD, BEHALA, KOLKATA-700 034 [PAN : ACHPC 4467 E] & C.O. NO. 112/KOL/2013 (ARISING OUT OF ITA NO. 1224/KOL/2010) ASSESSMENT YEAR : 2006-2007 SHRI SOUVIK CHATTERJEE,.......................... ..........CROSS OBJECTOR 46/11-1, BECHARAM CHATTERJEE ROAD, BEHALA, KOLKATA-700 034 -VS._ INCOME TAX OFFICER,.................. ...RESPONDENT WARD-27(4), KOLKATA 169, AJC BOSE ROAD, KOLKATA-700 014 APPEARANCES BY: SHRI RAJENDRA PRASAD, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI P. DEY, FCA, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 30, 2014 DATE OF PRONOUNCING THE ORDER : MAY 2 ND , 2014 O R D E R PER BENCH : ALL THESE APPEALS RELATE TO DIFFERENT ASSESSEES, W HO ARE EMPLOYEES OF M/S. TCS LIMITED. DURING THE PREVIOUS YEAR UNDER CONSIDERATION, THE I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 3 OF 11 ASSESSEES HAVE RENDERED THEIR SERVICES IN U.S.A. FO R CERTAIN PERIOD OF TIME. DURING THEIR PERIOD OF STAY IN U.S.A., THEY W ERE PAID LIVING ALLOWANCES. THE ASSESSEES HAD CLAIMED THE SUMS AS E XEMPT UNDER SECTION 10(14) OF THE ACT. THIS BEING THE FACT ON WHICH THE APPEALS HAVE BEEN DISPOSED OF BY THIS COMMON ORDER. 2. ITA NO. 1218/KOL./2010 & C.O. NO. 111/KOL./2013 ITA NO. 1218/KOL/2010 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XIV, KOLKATA IN APPEAL NO. 441/CIT(A)-XIV/08-09 DATED 22.03.2010 FO R THE ASSESSMENT YEAR 2006-07. C.O. NO. 111/KOL./2013 IS A CROSS OBJECTION FILED BY THE ASSESSEE IN THE REVENUES APPEAL IN ITA NO. 1218/KOL/2010. 4. SHRI RAJENDRA PRASAD, JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE AND SHRI P. DEY, FCA, REPRESENTED ON BEHALF OF THE ASSESSEES. 5. IN THE REVENUES APPEAL, THE REVENUE HAS CHALLEN GED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE INTEREST LEVIE D UNDER SECTION 234B IN RESPECT OF THE DISALLOWANCE OF THE LIVING ALLOWANCE UNDER SECTION 10(14) OF THE ACT. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN CO NFIRMING THE DENIAL OF EXEMPTION UNDER SECTION 10(14)(I) OF THE INCOME TAX ACT, 1961 READ WITH RULE 2BB(1) OF THE INCOME TAX RULES, 1962. 6. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ISSUE OF EXEMPTION UNDER SECTION 10(14)(I) IN RESPE CT OF LIVING ALLOWANCE WAS SQUARELY COVERED BY THE DECISION OF THE COORDIN ATE BENCH OF THIS TRIBUNAL IN THE CASE OF OTHER TCS EMPLOYEES, MOST S PECIFICALLY IN THE CASE OF ITO VS.- SRI SAPTARSHI GHOSH & OTHERS IN ITA NO . 915/KOL/2010 & I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 4 OF 11 OTHERS DATED 30.09.2011, WHEREIN THE COORDINATE BEN CH OF THIS TRIBUNAL HAS HELD AS UNDER :- 22. NOW, WE PROCEED TO EXAMINE THE FACTS OF THE P RESENT CASE IN THE CONTEXT OF PRINCIPLES DISCUSSED ABOVE. IN ORDER TO APPRECIATE THE CORRECT POSITION IN THIS REGARD, WE REPRODUCE HEREUNDER CERTAIN CONTENTS FROM VARIOUS DOCUMENTS. BEFORE US, THE DETAILS IN REGARD TO SAPTARSHI GHOSH HAVE BEEN FILED. IN THE DEPUTATION LETTER DATED 19.05.2005, IT HAS BEEN, INTER ALIA, STATED AS UNDER :- YOUR DEPUTATION IS EXPECTED TO LAST FOR A PERIOD O F APPROXIMATELY 3 MONTHS. HOWEVER, VARIOUS FACTORS COULD NECESSITATE YOUR BEING IN THE USA FOR A SHORTER OR LONGER DURATION, AND COULD RESULT IN A CHANGE OF LOCATION OR A TRANSFER TO A TCS PROJECT FOR A DIFFERENT CLIENT IN THE USA. IF THERE ARE ANY SUCH CHANGES WITH RESPECT TO YOUR DEPUTATION, WE WILL GIVE YOU AS MUCH ADVANCE NOTICE AS IS PRACTICABLE UNDER THE CIRCUMST ANCES. IN ORDER TO PREPARE YOU FOR THIS DEPUTATION, I ENCL OSE A COPY OF THE OVERSEAS DEPUTATION MANUAL FOR THE USA. THIS MANUAL CONTAINS IMPORTANT INFORMATION ON THE CUSTOMERS AND PRACTICES IN THE USA AS WELL AS OTHER INFORMATION T HAT WILL BE HELPFUL TO YOU ON YOUR DEPUTATION. YOU SHOULD REVIEW THE MANUAL CAREFULLY. REMEMBER, WHILE YOU ARE IN THE USA, YOU WILL BE A REPRESENTATIVE OF TCS, AND ARE EXPECT ED TO MAINTAIN A PROFESSIONAL IMAGE AT ALL TIMES. AFTER YOU HAVE REVIEWED THE ENCLOSED MATERIALS, OR IF YOU HAVE ANY QUESTIONS WHILE YOU ARE REVIEWING THEM, YOU SHOULD CONTACT THE PERSONNEL DE PARTMENT. IT IS ESSENTIAL THAT YOU FULLY UNDERSTAND ALL ASPECTS AND CONDITIONS OF YOUR DEPUT ATION BEFORE CHOOSING TO PROCEED ON THIS ASSIGNMENT AND SINGING YOUR DEPUTATION AGREEMENT AN D SERVICE AGREEMENT ADDENDUM. YOUR SIGNATURE BELOW ON THE ADDITIONAL COPY OF THIS LETT ER WILL CONFIRM YOUR UNDERSTANDING OF THIS OBLIGATION AND YOUR AGREEMENT TO FULFILL IT. 23. DEPUTATION AGREEMENT- UNITED STATES (AGREEMEN T) DATED 17.10.2004 BETWEEN ASSESSEES AND TATA CONSULTANCY LIMITED IS AS UNDER :- A. IN ORDER TO QUALIFY THE EMPLOYEE FOR OVERSEAS AS SIGNMENT, OR DEPUTATION (DEPUTATION), THE EMPLOYER HAS PROVIDED THE EMPLOYEE WITH EXTENSI VE SPECIALIZED TRAINING AND EXPERIENCE IN INFORMATION TECHNOLOGY AND ITS APPLICATION, INCL UDING TRADE SECRETS AND THE EMPLOYERS PROPRIETARY INFORMATION, FOR WHICH THE EMPLOYER INC URS CONSIDERABLE COSTS AND EXPENSES. B. THE EMPLOYER HAS SELECTED THE EMPLOYEE FOR DEPUT ATION TO THE UNITED STATES AND, BY READING AND SIGNING THIS DEPUTATION AGREEMENT, AND THE ANNEXED DEPUTATION TERMS AGREEMENT THE EMPLOYEE AGREES TO GO ON DEPUTATION W HERE THE EMPLOYEE WILL BE ASSIGNED TO USE HIS/HER TRAINING AND EXPERIENCE ON ONE OR MORE PROJECTS OF THE EMPLOYER FOR ITS CLIENTS IN THE UNITED STATES. C. THE EMPLOYEE SHALL ACQUIRE COMMERCIALLY USEFUL E XPERIENCE, KNOWLEDGE AND SKILLS WHITE ON DEPUTATION IN THE UNITED STATES, AND SUCH EXPERI ENCE, KNOWLEDGE AND SKILLS ARE OF SUBSTANTIAL VALUE TO THE EMPLOYER FOR DISSEMINATION BY THE EMPLOYEE TO THE 32 EMPLOYERS EMPLOYEES IN INDIA UPON THE EMPLOYEES RETURN TO IN DIA AFTER THE CONCLUSION OF THE DEPUTATION. D. THE EMPLOYER IS WILLING TO SEND THE EMPLOYEE ON DEPUTATION ONLY IF THE EMPLOYEE AGREES, AND AS PROVIDED BELOW THE EMPLOYEE DOES AGREE AND C OMMIT, TO COMPLETE HIS/HER DEPUTATION I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 5 OF 11 IN THE UNITED STATES, AND TO RETURN TO INDIA AT THE CONCLUSION OF A DEPUTATION IN ORDER TO IMPART THE EXPERIENCE, KNOWLEDGE AND SKILLS ACQUIRE D ON THE DEPUTATION TO EMPLOYEES OF THE EMPLOYER IN INDIA. THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS SET FORTH BELOW AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SU FFICIENCY OF WHICH ARE ACKNOWLEDGED BY BOTH PARTIES, THE PARTIES AGREE AS FOLLOWS: I. OVERSEAS DEPUTATION 1.1. GENERAL PROVISION. THE EMPLOYEE IS AN EMPLOYEE OF THE EMPLOYER PURSUANT TO A SERVICE AGREEMENT ENTERED INTO IN INDIA UPON COMMENCEMENT O F THE EMPLOYEES EMPLOYMENT THE SERVICE AGREEMENT, AND ALL OTHER CURRENT AGREEMENTS BETWEEN THE EMPLOYEE AND THE EMPLOYER REGARDING THE EMPLOYMENT RELATIONSHIP IN I NDIA, REMAIN IN FULL FORCE AND EFFECT THIS AGREEMENT GOVERNS THE TERMS OF THE EMPLOYEES DEPUT ATION TO THE UNITED STATES. A DEPUTATION IS DEFINED AS AN OVERSEAS ASSIGNMENT TO THE UNITED SLATES WHEN, FOR THIS DEPUTATION AGREEMENT, UNLESS OTHERWISE TERMINATED O R AMENDED ACCORDING TO ITS TERMS, SHALL GOVERN AND APPLY TO EACH AND EVERY DEPUTATION OF TH E EMPLOYEE TO THE UNITED STATES, AND IT SHALL REMAIN IN EFFECT DURING THE EMPLOYEES EMPLOYM ENT BY THE EMPLOYER. WITH RESPECT TO EACH SEPARATE DEPUTATION OF EMPLOYEE TO THE UNITED STATES A SEPARATELY EXECUTED DTA SHALL GOVERN THE PARTICULAR TERMS OF THAT DEPUTATIO N AND SHALL BE IN EFFECT ONLY DURING THE DEPUTATION TO WHICH IT APPLI ES. 1.2. PERIOD OF DEPUTATION. THE DEPUTATION WILL BEGI N ON THE DATE THE EMPLOYEE LEAVES INDIA FOR THE UNITED STATES FOLLOWING EXECUTION OF A DTA, AND SHALL CONTINUE UNTIL THE STATED TERM OF THE DEPUTATION, OR EXTENSION THEREOF, HAS EXPIRED,. THE INITIAL TERM OF THE DEPUTATION IS SET FORTH IN THE APPLICABLE DTA. HOWEVER, THE EMPLOYER RESERVES THE RIGHT TO SHORTEN OR END THE PERIOD OF A DEPUTATION AT ANY TIME, WITH OR WITHOUT ADVANCE NOTICE, AND THE DEPUTATION MAY BE EXTENDED BY MUTUAL AGREEMENT BETWEEN THE PARTIES . PLACE OF DEPUTATION- THE EMPLOYEE WILL BE ASSIGNED TO WORK AN ONE OF THE EMPLOYERS PROJECTS FOR A CLIENT IDENTIFIED IN THE DTA AND AT A LOCATION IN THE UNITED STATES AS STATED IN THE DTA. HOWEVER, THE EMPLOYER RESERVES THE RIGHT T O CHANGE THE LOCATION OF THE DEPUTATION ASSIGNMENT IN THE UNITED STATES, AND TO TRANSFER TH E EMPLOYEE TO AN EMPLOYER PROJECT FOR A DIFFERENT EMPLOYER CLILENT IN THE UNITED STATES. UP ON ANY SUCH CHANGE LOCATION OR ASSIGNMENT, THE PROVISIONS OF THIS AGREEMENT WILL CONTINUE TO A PPLY AND REMAIN IN FULL FORCE AND EFFECT, AND EMPLOYER SHALL CONFIRM TO EMPLOYEE IN WRITING T HE DETAILS CONCERNING THE NEW LOCATION OR ASSIGNMENT. COMPENSATION AND BENEFITS IN CONNECTION WITH THE DEPUTATION, THE EMPLOYEE WIL L RECEIVE COMPENSATION AND BENEFITS IN INDIA AND IN THE UNITED STATES, FOR SERVICES RENDER ED BY THE EMPLOYEE DURING THE DEPUTATION IN THE UNITED STATES. THE GROSS AMOUNT OF THE TOTAL COMPENSATION IN INDIA AND THE UNITED STATES IS SET FORTH IN THE APPLICABLE DTA, AND THIS TOTAL GROSS 33 AMOUNT OF COMPENSATION SHALL BE INCLUDABLE AS EARNINGS IN THE UNITED STATES AND REPORTED ON U.S. INTERNAL REVENUE SERVICE FORM W-2. MORE SPECIFICALLY, THE COMPENSATION AND B ENEFITS ON THE DEPUTATION WILL BE AS FOLLOWS: INITIAL PAYMENTS- BEFORE THE EMPLOYEE EMBARKS ON HI S/HER DEPUTATION, THE EMPLOYER WILL MAKE THE FOLLOWING PAYMENTS TO THE EMPLOYEE: I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 6 OF 11 (A) THE EMPLOYER WILL COMPENSATE TO THE EMPLOYEE AN AMOUNT IN RUPEES THAT IS DESIGNED TO ENABLE THE EMPLOYEE TO PURCHASE ANY USUAL AND NECES SARY OUTFITS FOR THE DEPUTATION, AND TO COVER INITIAL INCIDENTAL TRAVEL-RELATED EXPENSES IN EMBARKING ON THIS OVERSEAS ASSIGNMENT. (B) THE EMPLOYER WILL COMPENSATE THE EMPLOYEE AN AM OUNT IN US. DOLLARS OR TRAVELERS CHEQUES FOR THE EMPLOYEES USE IN HIS/HER DISCRETIO N FOR EXPENSES SUCH AS HOUSING AND TRANSPORTATION EXPENSES INCURRED ON ARRIVAL IN THE UNITED STATES AND FOR THE PURPOSE OF SETTLING DOWN. (C) THE AMOUNTS AND DETAILS OF THESE PAYMENTS MAY B E SPECIFIED IN THE DTA AND/OR OTHER DOCUMENTS FURNISHED TO THE EMPLOYEE PRIOR TO THE CO MMENCEMENT OF A DEPUTATION. 2.2. AIRFARE- BEFORE THE EMPLOYEE EMBARKS ON HIS/HE R DEPUTATION, THE EMPLOYER WILL OBTAIN A ROUND TRIP AIRLINE TICKET FOR THE EMPLOYEES TRAVEL BETWEEN INDIA AND THE UNITED STATES. THE EMPLOYER WILL BEAR THE COST OF THIS AIRFARE, AND TH IS AMOUNT WILL NOT BE INCLUDED IN GROSS COMPENSATION. THE EMPLOYER SHALL ALSO BEAR THE COST OF TRANSPORTATION WITHIN THE UNITED STATES BETWEEN THE PLACE OF ARRIVAL AND THE SITE WH ERE EMPLOYEE SHALL REPORT TO WORK. COMPENSATION AND BENEFITS IN INDIA - DURING THE PER IOD OF THE DEPUTATION, THE EMPLOYEE WILL CONTINUE TO RECEIVE HIS/HER SALARY AND BENEFITS IN INDIA, AS IF THE EMPLOYEE HAD CONTINUED TO WORK FOR THE EMPLOYER IN INDIA, SUBJECT TO ANY TAX REQUIREMENTS UNDER THE LAWS OF THE UNITED STATES AND ITS STATES. MOREOVER, THE PERIOD OF THE DEPUTATION WILL BE TREATED AS APPROVED SERVICE WITH THE EMPLOYER AND COUNTED FOR ALL OF TH E FOLLOWING PURPOSES IN INDIA, BASED ON THE SALARY THE EMPLOYEE CONTINUES TO RECEIVE IN INDIA W HILE ON DEPUTATION, PRIVILEGE LEAVE, PROMOTION, ANNUAL INCREMENT AND PAYMENT OF HOUSING SUBSIDY, PERFORMANCE REWARD, PROVIDENT FUND CONTRIBUTIONS AND SUPERANNUATION FUN D CONTRIBUTIONS. COMPENSATION IN THE UNITED STATES- DURING THE PERIO D OF THE DEPUTATION THE EMPLOYEE WILL RECEIVE ADDITIONAL COMPENSATION IN U.S. DOLLARS, IN THE AMOUNT STATED IN THE DTA. THIS COMPENSATION SHALL BE FOR LIVING AND OTHER EXPENSES IN THE UNITED STATES. IT SHALL BE PART OF EMPLOYEES TOTAL COMPENSATION FOR PURPOSES OF U.S. DEPARTMENT OF LABOR PREVAILING WAGE DETERMINATIONS. TOTAL GROSS COMPENSATION- AMOUNTS OF SALARY PAID BY THE EMPLOYER IN INDIA (UNDER PARAGRAPH 2.3) AND COMPENSATION PAID FOR LIVING EXP ENSES IN THE UNITED STATES (UNDER PARAGRAPH 2.4) SHALL BE AGGREGATED AND THUS SHALL B E TREATED AS THE EMPLOYEES TOTAL GROSS COMPENSATION UNDER U.S. LAW WITH RESPECT TO THE EMP LOYEES EMPLOYMENT IN THE UNITED STATES. YOUR DEPUTATION SHALL BEGIN ON OR ABOUT 17TH OCTOBE R, 2004, YOU SHALL INITIALLY BE ASSIGNED TO PERFORM IT CONSULTING SERVICES ON BEHALF OF TCS FOR GE HEALTHCARE AT MILWANKEE. 3. YOUR DEPUTATION IN THE UNITED STATES IS SCHEDULE D FOR A PERIOD OF 12 MONTHS. HOWEVER, VARIOUS FACTORS COULD REQUIRE YOU TO RENDER SERVICE S TO TCS FOR ITS CLIENTS IN THE UNITED STATES FOR A SHORTER OR LONGER DURATION, AND COULD RESULT IN A CHANGE OF LOCATION OR TRANSFER TO A TCS PROJECT FOR A DIFFERENT CLIENT IN THE UNITED STATES . IF THERE ARE ANY CHANGES WITH RESPECT TO THE PERIOD OF YOUR DEPUTATION OR THE LOCATION OF YOUR A SSIGNMENT, WE WILL GIVE YOU AS MUCH ADVANCE NOTICE AS IS PRACTICABLE UNDER THE CIRCUMST ANCES. IT IS UNDERSTOOD THAT YOU HAVE NO RIGHT TO SERVE ANY PARTICULAR FIXED PERIOD OF DEPUT ATION OR TO SERVE AT ANY PARTICULAR LOCATION OR CLILENT PROJECT. HOWEVER, IF THE PERIOD OF YOUR DEPUTATION IS EXTENDED BEYOND THE SCHEDULED 12 MONTH PERIOD, THE EXTENSION SHALL BE REFLECTED I N A MUTUAL WRITTEN AGREEMENT. I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 7 OF 11 4. THE FOLLOWING SPECIFIC PROVISIONS SHALL GOVERN Y OUR DEPUTATION :- (A) OVERSEASTRAVEL AND REIMBURSEMENT TCS SHALL BE U SED TRAVELERS CHEQUES, WHICH IS DESIGNED FOR YOUR USE IN METING INITIAL EXPENSES FO R TRANSPORTATION AND HOUSING WHEN YOU ARRIVE IN THE UNITED STATES. (B) SALARY AND BENEFITS IN INDIA :- AS STATED IN TH E DEPUTATION AGREEMENT, YOU WILL CONTINUE TO RECEIVE YOUR SALARY AND BENEFITS IN INDIA DURING TH E PERIOD OF THE DEPUTATION, SUBJECT TO ANY TAX REQUIREMENTS OF THE UNITED STATES AND ITS STATE S. (C) COMPENSATION IN THE UNITED STATES.. IN ADDITION TO THE COMPENSATION AND BENEFITS YOU CURRENTLY RECEIVE AND WILL CONTINUE TO RECEIVE IN I NDIA WHO ON DEPUTATION, YOU SHALL RECEIVE ADDITIONAL COMPENSATION IN THE UNITED STATES IN THE GROSS AMOUNT OF US$50000 LESS DEDUCTIONS REQUIRED BY LAW OR OTHERWISE VOLUNTARILY AUTHORIZED BY YOU. THIS COMPENSATION SHALL BE FOR LIVING AND OTHER EXPENSES IN THE UNITE D STATES. (D) TOTAL GROSS COMPENSATION AMOUNTS OF SALARY PAID BY TCS IN INDIA (UNDER PARAGRAPH 4 (B) ABOVE) AND THE ADDITIONAL COMPENSATION IN THE U NITED STATES (UNDER PARAGRAPH 4(C) ABOVE) SHALL BE AGGREGATED AND THUS SHALL BE TREATE D AS YOUR TOTAL GROSS COMPENSATION FOR PURPOSES OF U.S. LAW WITH RESPECT TO YOUR EMPLOYMEN T IN THE UNITED STATES. 24. FROM THE ABOVE NOTED CONTENTS OF DEPUTATION LE TTER AND AGREEMENT, ETC. IT IS CLEAR THAT THE PLACE OF POSTING DID NOT CHANGE TO USA AND THE EMPLOYEES WERE SENT THERE WITH REFERENCE TO THE SPECIFIC PROJECTS THOUGH THE PROJE CTS COULD CHANGE AT THE INSTANCE OF EMPLOYER. THE EMPLOYEES WERE TO REPORT BACK TO THE EMPLOYER AND SERVE THE EMPLOYER AFTER ACQUIRING SKILL FROM USA PROJECTS. THE SALARY STRUC TURE OF EMPLOYEES REMAINED SAME AND THE ADDITIONAL AMOUNTS WERE PAID ONLY FOR THE PURPOSES OF ADDITIONAL ROUTINE EXPENSES IN USA. THIS IS EVIDENT FROM DEPUTATION AGREEMENT, WHICH DE ALS WITH COMPENSATION AND BENEFITS NOTED ABOVE. IT IS SPECIFICALLY MENTIONED IN PARA 2.3 THA T DURING THE PERIOD OF DEPUTATION, THE EMPLOYEE WILL CONTINUE TO RECEIVE HIS SALARY AND BE NEFITS IN INDIA. THIS CLEARLY SHOWS THAT PLACE OF POSTING HAD NOT CHANGED, WHICH IS BASIC IN GREDIENT FOR DECIDING WHETHER A PERSON HAD BEEN TRANSFERRED OR WAS ON TOUR. LD. CIT(APPEAL S) HAS WRONGLY CONCLUDED THAT HEADQUARTERS HAD BEEN SHIFTED FROM KOLKATA TO USA. LD. CIT(APPEALS) HAS ALSO POINTED OUT THAT EMPLOYEES HAD A CHOICE TO SAY NO ALSO. IN THE PRESENT CASE, THE EMPLOYEES WERE TO BE SENT TO USA AND, THEREFORE, THEIR CHOICE HAD TO BE TAKEN BEFORE SENDING THEM ABROAD. SINCE THE ASSESSEES WERE TO BE SENT ABROAD, THEY HAD TO OBTAI N VISA ALSO FOR THAT PURPOSE. IN THAT REGARD, ALL THE SPECIFIC REQUIREMENTS HAD TO BE FUL FILLED BY THE EMPLOYER. BUT THAT SHOULD NOT DETRACT US FROM EXAMINING THE TRUE IMPORT OF THE TE RM TOUR. LD. CIT(APPEALS) HAS ALSO POINTED OUT THAT AS PER THE DEPUTATION AGREEMENT, T HE ASSESSEES WERE ENTITLED TO TAKE THEIR FAMILIES BUT THAT ALSO CANNOT BE A BASIS FOR DECIDI NG WHETHER THE ASSESSEES WERE TO BE TREATED ON TOUR IN TERMS OF RULE 2BB(1)(B) OR NOT BECAUSE T HAT RULE DOES NOT PROHIBIT TAKING THE FAMILY ON TOUR. WE ARE, THEREFORE, OF THE CONSIDERE D OPINION THAT KEEPING IN VIEW THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ASSESSE ES WERE TO BE TREATED ON TOUR AND, THEREFORE, ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 10(14 )(I) READ WITH RULE 2BB(1)B). FURTHER, WE FIND THAT THE ISSUE RELATING TO LIVING ALLOWANCE HA S BEEN CONSIDERED BY VARIOUS DECISIONS RELIED UPON BY THE LD SENIOR COUNSEL FOR THE ASSESS EES WITH REFERENCE TO NON-RESIDENTS. LD. CIT(APPEALS) HAS DISTINGUISHED ALL SUCH CASE LAWS O N THE GROUND THAT THEY RELATE TO NON- RESIDENTS AND NOT WITH REFERENCE TO THE EMPLOYEES B EING SENT ABROAD. WE DO NOT FIND ANY RATIONALE IN DISTINGUISHING THE CASE LAWS NOTED IN LD. SENIOR COUNSELS SUBMISSIONS MERELY ON THE GROUND THAT THEY RELATED TO NON-RESIDENTS. NON- RESIDENTS COMING TO INDIA AND INDIAN GOING ABROAD, ARE TO BE CONSIDERED ON SAME FOOTING AS FAR AS THE ISSUE IS IN RESPECT OF EXEMPTION I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 8 OF 11 UNDER SECTION 10(14)(I) READ WITH RULE 2BB(1). IT D OES NOT LAY DOWN SEPARATE CONSIDERATION FOR NON-RESIDENTS VIS--VIS RESIDENTS. 25. FURTHER, ONE MORE ASPECT WHICH IS TO BE CONSIDE RED IS WITH REGARD TO ACTUAL INCURRING OF EXPENDITURE. IN THIS REGARD, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY HE DECISION OF ITAT, MUMBAI DATED 21.04.2006 IN ITA NOS. 5561 & 5570/MUM ./2002 FOR THE ASSESSMENT YEARS 1997-98 AND 1998-99 IN THE CASE OF MADANLAL MOHANLA L NARANG VS.- ACIT(SUPRA), WHEREIN IT HAS BEEN HELD THAT IT IS NOT OPEN TO THE REVENU E TO CALL FOR THE DETAILS OF EXPENSES ACTUALLY INCURRED UNLESS THE SPECIFIC ALLOWANCE ARE DISPROPO RTIONATELY HIGH COMPARED TO THE SALARY RECEIVED BY HIM OR UNREASONABLE WITH REFERENCE TO T HE NATURE OF THE DUTIES PERFORMED BY THE ASSESSEE. FURTHER, THE ASSESSEES HAD SUBMITTED THAT FBT MUST HAVE BEEN PAID BY THE EMPLOYER. HOWEVER, AS NOTED EARLIER, EMPLOYER HAS NOT PAID FB T. IN OUR OPINION, THE CONSIDERATIONS FOR ELIGIBILITY OF EXEMPTION UNDER SECTION 10(14)(1) AR E ENTIRELY DIFFERENT AND NOTHING TURNS AROUND ON THE APPLICABILITY OR NON-APPLICABILITY OF THE PROVISIONS OF FBT. IN VIEW OF ABOVE DISCUSSIONS, THE APPEALS OF THE AS SESSEES AS WELL AS THE CROSS OBJECTIONS ARE ALLOWED. 26. WITH REGARD TO THE DEPARTMENTAL APPEALS, WE HA VE ALREADY HELD THAT LIVING ALLOWANCE IS NOT TAXABLE. THEREFORE, INTEREST LEVIE D UNDER SECTION 234B CANNOT BE SUSTAINED. EVEN OTHERWISE, WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT, SPECIAL BENCH IN THE CASE OF SUMIT BHATTACHARYA VS.- ACIT REPORTED IN [2008] 300 ITR PAGE 347 (MUMBAI)(SB). IN VIEW OF THE ABOVE, THE DEPARTMENTAL APPEALS ARE DISMISSED. 27. BEFORE PARTING, WE MAY FURTHER OBSERVE THAT, I N ANY VIEW OF THE MATTER, THE ENTIRE CONTROVERSY IS ALMOST REVENUE NEUTRAL BECAUSE EVEN IF IT IS HELD THAT ASSESSEES WERE NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 10(14)(I) IN R ESPECT OF LIVING ALLOWANCE, THEN IN VIEW OF DTAA WITH USA, THE ASSESSEES WOULD BECOME ENTITLED TO GET TAX CREDIT IN RESPECT TAX PAID ON LIVING ALLOWANCE IN USA. HOWEVER, AS WE HAVE ALREAD Y HELD THAT LIVING ALLOWANCE IS NOT TAXABLE IN INDIA, THEREFORE, ASSESSEES ARE ENTITLED FOR EXEMPTION UNDER SECTION 10(14(I). THEREFORE, THEY CANNOT CLAIM TAX CREDIT IN RESPECT OF TAX PAID IN USA ON LIVING ALLOWANCE BECAUSE AS VERY FAIRLY POINTED OUT BY THE LD. SENIO R COUNSEL FOR THE ASSESSEES, DTAA WOULD COME INTO PLAY ONLY WHEN A PARTICULAR RECEIPT IS TA XABLE IN BOTH THE COUNTRIES. 28. IN THE RESULT, THE APPEALS AS WELL AS THE CROS S OBJECTIONS FILED BY THE ASSESSEES ARE ALLOWED AND THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. 7. AS IT IS NOTICED THAT THE ISSUE IN THE CROSS OBJ ECTION IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH OF THIS TRIBUNAL, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 9 OF 11 8. IN RESPECT OF THE REVENUES APPEAL REGARDING THE LEVY OF INTEREST UNDER SECTION 234B, IT WAS SUBMITTED BY THE LD. A.R . THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION DATED 19.08.2010 O F COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS.- SHRI ATIS H SREEMANY & OTHERS IN ITA NO. 1172/KOL/2010, WHEREIN THE COORDINATE BENCH OF THIS TRIBUNAL HAS HELD IN PARA 6 AS FOLLOWS:- 6. BEFORE LD. CIT(APPEALS), THE ASSESSEES HAD ALSO ASSAILED THE FINDING OF ASSESSING OFFICER IN RESPECT OF CHARGING OF INTERES T UNDER SECTION 234B RELYING ON THE DECISION OF ITAT, SPECIAL BENCH, MUMBAI IN T HE CASE OF SUMIT BHATTACHARYA VS.- ACIT [300 ITR (AT) 347(MUM.)(SB) . 9. IN REPLY, LD. D.R. VEHEMENTLY SUPPORTED THE ORDE R OF ASSESSING OFFICER AND PLEADED THAT THE ORDER OF LD. CIT(APPEA LS) WAS LIABLE TO BE REVERSED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE IN RESPECT OF THE REVENUES APPEAL IS SQUAREL Y COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF SHRI ATISH SREEMANY REFERRED TO SUPRA, THE FINDING OF THE LD. CIT(APPEALS) IN CANCELLING THE LEVY OF INTEREST UNDER SECTION 234B STANDS UPHELD. CONSEQUENTLY THE APPEAL FILED BY THE REVENUE STANDS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWE D. 11. ITA NO. 1216/KOL/2010 (REVENUES APPEAL) ITA NO. 1216/KOL/2010 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XIV, KOLKATA IN RESPECT OF LEVY OF INTEREST UNDER SECTION 234B IN A PPEAL NO. 418/CIT(A)- XIV/08-09 DATED 22.03.2010 FOR THE ASSESSMENT YEAR 2006-07. 12. THE ISSUE IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION IN ITA NO. 1218/KOL/2010 (SUPRA). CONSEQUENTLY OUR FINDING THEREIN APPLIES TO THIS APPEAL ALSO. I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 10 OF 11 13. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 14. ITA NO. 1219/KOL/2010 (REVENUES APPEAL) ITA NO. 1219/KOL/2010 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XIV, KOLKATA IN RESPECT OF LEVY OF INTEREST UNDER SECTION 234B IN A PPEAL NO. 488/CIT(A)- XIV/08-09 DATED 18.03.2010 FOR THE ASSESSMENT YEAR 2006-07. 15. THE ISSUE IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION IN ITA NO. 1218/KOL/2010 (SUPRA). CONSEQUENTLY OUR FINDING THEREIN APPLIES TO THIS APPEAL ALSO. 16. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 17. ITA NO. 1224/KOL/2010 & C.O. NO. 112/KOL/2013 ITA NO. 1224/KOL/2010 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XIV, KOLKATA IN APPEAL NO. 472/CIT(A)-XIV/08-09 DATED 18.03.2010 IN RESPECT OF LEVY OF INTEREST UNDER SECTION 234B FOR THE ASSESSMENT YEAR 2006-07. 18. THE ISSUE IN THIS APPEAL IS IDENTICAL TO REVENU ES APPEAL IN ITA NO. 1218/KOL./2010(SUPRA). OUR FINDING THEREIN APPLIES TO THIS APPEAL. CONSEQUENTLY THE REVENUES APPEAL STANDS DISMISSED. 19. CROSS OBJECTION NO. 112/KOL/2013 IS IDENTICAL T O THE CROSS OBJECTION FILED BY THE ASSESSEE IN C.O. NO. 111/KOL /2013 REFERRED TO SUPRA. CONSEQUENTLY OUR FINDING THEREIN APPLIES TO THIS CROSS OBJECTION ALSO. CONSEQUENTLY THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED. 20. IN THE RESULT, THE APPEALS FILED BY THE REVENUE STAND DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEES STAND A LLOWED. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 2 ND DAY OF MAY, 2014 I.T.A. NO. 1218/KOL./2010 C.O. NO. 111-KOL-2013(IN ITA 1218-KOL-2010) ITA NOS. 1216, 1219, 1224-KOL-2010 & C.O. NO. 112-KOL-2013 (IN ITA NO. 1224-KOL-2010) ASSESSMENT YEAR: 2006-07 PAGE 11 OF 11 COPIES TO : (1) INCOME TAX OFFICER, WARD-27(4), KOLKATA, 169, AJC BOSE ROAD, KOLKATA-700 014 (2)(I) SHRI SOUMENDRA PRASAD DASH, THE CONDOVILLA BENGAL AMBUJA, NEW TOWN, KOLKATA-700 156, (II) SHRI SOUMEN SAMANTA, 3/2, RAMLAL DUTTA LANE, BHADRAKALI, HOOGHLY-712 232 (III) SMT. SUDARSHANA THAKURTA, 1, AVENUE EAST, MODERN PARK, KOLKATA-700 075 (IV) SHRI SOUVIK CHATTERJEE, 46/11-1, BECHARAM CHATTERJEE ROAD, BEHALA, KOLKATA-700 034 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.