ITO, Ward - 27(4), Kolkata, Kolkata V. Shri Saptarshi Ghosh, Kolkata

ITA 915/KOL/2010

2006-2007

Pronouncement Date: -

Result: Assessee

3 downloads

Appeal Details

Counselvise Citation

[2011] 140 COUNSELVISE.COM (IT) 54568 (ITAT-KOLKATA)

Assessee PAN

Bench

Appeal Number

CRN Number

Duration Of Justice

1 year(s) 4 month(s) 23 day(s)

Appellant

Respondent

Appeal Type

Income Tax Appeal

Pronouncement Date

30-09-2011

Appeal Filed By

Department

Order Result

Dismissed

Bench Allotted

Assessment Year

2006-2007

Appeal Filed On

07-05-2010

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . . .. . , ! ! ! ! '! '! '! '!, , , , ] [BEFORE SHRI S.V. MEHROTRA, AM & SHRI M AHAVIR SINGH, J.M.] !# !# !# !# / I.T.A NO. 915/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI SAPTARSHI GHOSH KOLKATA. KOLKATA [PAN : AHFPG 4 555 J] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 95/KOL/2010 !# !# !# !# / A/O ITA NO . 915 /KOL/2010 '$% '$% '$% '$% &' &' &' &'/ // / ASSESSMENT YEAR : 2006-07 SHRI SAPTARSHI GHOSH -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AHFPG 4555 J] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 917/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI ARNAB KUMAR JANA KOLKATA. KOLKATA [PAN : ACEPJ 9 409 N] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1099/KOL/2010 '$ '$'$ '$% &' % &' % &' % &'/ // / ASSESSMENT YEAR : 2006-07 SHRI ARNAB KUMAR JANA -V S.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ACEPJ 9409 N] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 918/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI PARTHA MANNA KOLKATA. KOLKATA [PAN : AJJPM 4 226 A] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & 2 / 01 / 01 / 01 / 01 /C.O.NO. 63/KOL/2010 !# !# !# !# / A/O ITA NO . 918 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI PARTHA MANNA -V S.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AJJPM 4226 A] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 919/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI SAPTARSHI MUKHERJEE KOLKATA. KOLKATA [PAN : ALCPM 3 201 G] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 70/KOL/2010 !# !# !# !# / A/O ITA NO . 919 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI SAPTARSHI MUKHERJEE -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ALCPM 3201 G] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 921/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI AMITAAVA DAS KOLKATA. KOLKATA [PAN : AEGPD 8 580 E] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 998/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 TARUN BANDHOPADHYA -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ACYPB 3697 A] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & ! ! ! !# # # # / I.T.A NO. 927/KOL/2010 3 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- TARUN BANDHOPADHYA KOLKATA. KOLKATA [PAN : ACYPB 3 697 A] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 999/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SUCHIBRATA PALAI -VS. - INCOME TAX OFFICER, WARD-27(4) KOLKATA. [PAN : AFKPP 1804 J] KOLKATA ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 923/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SUCHIBRATA PALAI KOLKATA. KOLKATA [PAN : AFKPP 1 804 J] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1000/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 ARGHA DE -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA. [PAN : AHBPD 8080 F] KOLKATA ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 928/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- ARGHA DE KOLKATA. KOLKATA [PAN : AHBPD 8 080 F] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1001/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 ABHIJIT BARUA -VS .- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ADZPB 8923 F] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 925/KOL/2010 4 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- ABHIJIT BARUA KOLKATA. KOLKATA [PAN : ADZPB 8 923 F] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) & ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) !# !# !# !# / I.T.A NO. 920/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SOUMYA SAHA KOLKATA. KOLKATA [PAN : AWMPS 81 71 Q] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1002/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SOUMYA SAHA -V S.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AWMPS 8171 Q] KOLKATA. & !# !# !# !# / I.T.A NO. 916/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI ANJAN KUMAR GUPTA KOLKATA. KOLKATA [PAN : AFDPG 27 13 A] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1023/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI ANJAN KUMAR GUPTA -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AFDPG 2713 A] KOLKATA. & !# !# !# !# / I.T.A NO. 922/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI SURAJIT BHATTACHARYA KOLKATA. KOLKATA [PAN : AEOPB 90 65 N] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1022/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 5 SHRI SURAJIT BHATTACHARYA -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AEOPB 9065 N] KOLKATA. & !# !# !# !# / I.T.A NO. 924/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI BIPLAB CHANDRA DAS KOLKATA. KOLKATA [PAN : ACPPD 3 040 A] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1020/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI BIPLAB CHANDRA DAS -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ACPPD 3040 A] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 929/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI BIKRAM KHASNOBIS KOLKATA. KOLKATA [PAN : ANLPK 6 741 Q] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1021/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI BIKRAM KHASNOBIS -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : ANLPK 6741 Q] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1159/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI KRISHANU CHOUDHURY KOLKATA. KOLKATA [PAN : AEJPC 0 869 C] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-. -. -. -.*+ *+*+ *+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 102/KOL/2010 !# !# !# !# / A/O ITA NO . 1159 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 6 SHRI KRISHANU CHOUDHURY -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AEJPC 0869 C] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1160/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI WRITUPORNO GANGULY KOLKATA. KOLKATA [PAN : AHGPPG 9174 L] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 99/KOL/2010 !# !# !# !# / A/O ITA NO . 1160 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI WRITUPORNO GANGULY -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AHGPPG 9174 L] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1162/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI NIRMAL KUMAR KUNDU KOLKATA. KOLKATA [PAN : AEQPK 1 642 G] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) / / / / 01 01 01 01 /C.O.NO. 101/KOL/2010 !# !# !# !# / A/O ITA NO. 1162/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 SHRI NIRMAL KUMAR KUNDU -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AEQPK 1642 G] KOLKATA. [ / / / / 01 01 01 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+ /RESPONDENT] & !# !# !# !# / I.T.A NO. 1154/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. TANIYA MITRA 7 KOLKATA. KOLKATA [PAN : AINPM 4 014 H] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) & / / / / 01 01 01 01 /C.O.NO. 91/KOL/2010 !# !# !# !# / A/O ITA NO. 1154/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 SMT. TANIYA MITRA -VS .- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AINPM 4014 H] K OLKATA. [ / / / / 01 01 01 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+ /RESPONDENT] & !# !# !# !# / I.T.A NO. 1157KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI KRISHNASHIS CHOWDHURY KOLKATA. KOLKATA [PAN : ADSPC 2 214 P] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) & !# !# !# !# / I.T.A NO. 1158KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI KAUSHILE CHAKRABORTI KOLKATA. KOLKATA [PAN : ADWPC 4 582 G] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) & !# !# !# !# / I.T.A NO. 1156/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI KAUSHIK KUNDU KOLKATA. KOLKATA [PAN : AKYPK 6 719 L] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) & !# !# !# !# / I.T.A NO. 1155/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI RANJIT SINGH KOLKATA. KOLKATA [PAN : AZDPS 0 403 P] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) 8 & !# !# !# !# / I.T.A NO. 1161/KOL/2010 '$% '$% '$% '$% &' &' &' &' /ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI RUPAK BASAK KOLKATA. KOLKATA [PAN : AIFPB 4 184 R] ( *+ *+ *+ *+ /APPELLANT) ( -.*+ -.*+ -.*+ -.*+ /RESPONDENT) & !# !# !# !# / I.T.A NO. 1163/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI TANMOY BOSE KOLKATA. KOLKATA [PAN : AFWPB 7 502 B] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 88/KOL/2010 !# !# !# !# / A/O ITA NO . 1163 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI TANMOY BOSE -V S.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AFWPB 7502 B] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1164/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI MANAS PATRA KOLKATA. KOLKATA [PAN : AKLPP 9 559 N] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO. 94/KOL/2010 !# !# !# !# / A/O ITA NO . 1164 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI MANAS PATRA -VS.- INCOME TAX OFFICER, W ARD-27(4) KOLKATA [PAN : AKLPP 9559 N] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & 9 !# !# !# !# / I.T.A NO. 1208/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. SOUMI DEB ROY KOLKATA. KOLKATA [PAN : AEYPR 8 241 N] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.90/KOL/2010 !# !# !# !# / A/O ITA NO . 1208 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. SOUMI DEB ROY -VS.- INCOME TAX OFFICER, W ARD-27(4) KOLKATA [PAN : AEYPR 8241 N] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1179/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI JOYDEEP BHAR KOLKATA. KOLKATA [PAN : AFVPB 4 746 G] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.93/KOL/2010 !# !# !# !# / A/O ITA NO . 1179 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI JOYDEEP BHAR -VS.- INCOME TAX OFFICER, W ARD-27(4) KOLKATA [PAN : AFVPB 4746 G] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1226/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. HEMA NARSIMHAN KOLKATA. KOLKATA [PAN : ADHPN 1 791 R] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & 10 / 01 / 01 / 01 / 01 /C.O.NO.96/KOL/2010 !# !# !# !# / A/O ITA NO . 1226 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. HEMA NARSIMHAN -VS.- INCOME TAX OFFICER, WARD-2 7(4) KOLKATA [PAN : ADHPN 1791 R] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1221/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI SUBHODIP BOSE KOLKATA. KOLKATA [PAN : AHOPB 0 456 A] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.89/KOL/2010 !# !# !# !# / A/O ITA NO . 1221 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI SUBHODIP BOSE - VS.- INCOME TAX OFFICER, WARD-27( 4) KOLKATA [PAN : AHOPB 0456 A] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1220/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. SWATI GHOSH KOLKATA. KOLKATA [PAN : AGRPG 1 007 E] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.84/KOL/2010 !# !# !# !# / A/O ITA NO . 1220 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. SWATI GHOSH -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AGRPG 1007 E] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & 11 !# !# !# !# / I.T.A NO. 1098/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI SHRUTI BHATTACHARYA -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AFIPB 6591 C] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1217/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. SARANI CHAUDHURI KOLKATA. KOLKATA [PAN : AFPPC 5 324 M] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.117/KOL/2010 !# !# !# !# / A/O ITA NO . 1217 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. SARANI CHAUDHURI -V S.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AFPPC 5324 M] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1225/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. BAISHALI ACHARYA (MUKHOPADHYAY) KOLKATA. KOLKATA [PAN : AETPM 8006 P] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.121/KOL/2010 !# !# !# !# / A/O ITA NO . 1225 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. BAISHALI ACHARYA (MUKHERJEE) -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AETPM 8006 P] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1170/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SMT. ANINDITA ROY CHOWDHURY KOLKATA. KOLKATA [PAN : AGFPR 820 7 D] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & 12 / 01 / 01 / 01 / 01 /C.O.NO.119/KOL/2010 !# !# !# !# / A/O ITA NO . 1170 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SMT. ANINDITA ROY CHOWDHURY -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AGFPR 8207 D] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1173/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI ABHISHEK GHOSH KOLKATA. KOLKATA [PAN : AHIPG 263 8 K] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.104/KOL/2010 !# !# !# !# / A/O ITA NO . 1173 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI ABHISHEK GHOSH -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AHIPG 2638 K] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & !# !# !# !# / I.T.A NO. 1176/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI DIBYARAJ BASU KOLKATA. KOLKATA [PAN : AHIPB 635 6 L] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.118/KOL/2010 !# !# !# !# / A/O ITA NO . 1176 /KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI DIBYARAJ BASU -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AHIPB 6356 L] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] & 13 !# !# !# !# / I.T.A NO. 14/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 SHRI ARUNAVA DAM -VS. - INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AEWPD 5548 N] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1669/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 ABHIJIT BANDYOPADHYAY -VS.- INCOME TAX OFFICER, WARD-27(4) KOLKATA [PAN : AEZPB 3889 H] KOLKATA. ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & !# !# !# !# / I.T.A NO. 1228/KOL/2010 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-27(4) -VS.- SHRI BASUDEV ACHARYA KOLKATA. KOLKATA [PAN : ACQPA 657 5 Q] ( (( (*+ *+ *+ *+ /APPELLANT ) )) ) ( (( (-.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ) )) ) & / 01 / 01 / 01 / 01 /C.O.NO.122/KOL/2010 !# !# !# !# / A/O ITA NO . 1228 /KOL/2010 '$% '$% '$% '$% &' &' &' &'/ // / ASSESSMENT YEAR : 2006-07 SHRI BASUDEV ACHARYA -VS.- INCOME TAX OFFICER, WARD-27(4 ) KOLKATA [PAN : ACQPA 6575 Q] KOLKATA. [ / 01 / 01 / 01 / 01 /CROSS OBJECTOR] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT] ASSESSEES BY : S/SHRI R.N. BAJORIA, B.K. GHOS H & MS. S. DUTTA DEPARTMENT BY : SHRI S.K. ROY 2$ 3 4 5 2$ 3 4 5 2$ 3 4 5 2$ 3 4 5 /DATE OF HEARING : 14.09.2011 6& 4 5 6& 4 5 6& 4 5 6& 4 5 /DATE OF PRONOUNCEMENT : 30.09.2011 7 / ORDER 14 AS PER BENCH :- THE ASSESSEES AS WELL AS THE DEPARTMENT HAVE FILED THESE APPEALS FOR ASSESSMENT YEAR 2006-07 AGAINST ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA DATED 26.02.2010. 2. ALL THE ASSESSEES IN THE PRESENT APPEALS WERE SA LARIED EMPLOYEES OF AN INDIAN COMPANY STYLED M/S. TCS LIMITED AND WERE DEPLOYED ON DEPUTA TION IN USA FOR RENDERING SERVICES AS EMPLOYEES OF TCS LIMITED. THE SERVICES WERE RENDERE D OUTSIDE INDIA AND FOR RENDERING SUCH SERVICES, EMPLOYER-COMPANY PAID ADDITIONAL AMOUNT T O ITS EMPLOYEES IN USA UNDER THE TERM LIVING ALLOWANCE. ASSESSING OFFICER WAS OF THE OP INION THAT THE LIVING ALLOWANCE WAS NOTHING BUT AN INCREASED SALARY UNDER A NEW TERM. T HE ASSESSEES HAD CLAIMED THAT THE LIVING ALLOWANCE RECEIVED BY THEM WAS EXEMPT UNDER SECTION 10(14) OF THE INCOME TAX ACT. ASSESSING OFFICER NOTED THAT THE ASSESSEES HAD ALSO CLAIMED DTAA RELIEF ON THE TAX PAID IN USA ON THE ENTIRE AMOUNT OF LIVING ALLOWANCE GRANTE D BY TCS LTD., TO THE ASSESSEES FOR RENDERING SERVICES IN USA. THE ASSESSEES IN THEIR E XPLANATIONS POINTED OUT THAT THE LIVING ALLOWANCE WAS EXEMPT UNDER THE PROVISIONS OF SECTIO N 10(14(I) OF THE ACT. THE ASSESSEES SUBMISSIONS HAVE BEEN REPRODUCED AT PAGE 2 OF THE A SSESSMENT ORDER, WHICH ARE AS UNDER :- SECTION 10 IN COMPUTING THE TOTAL INCOME OF A PREV IOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITH ANY OF THE FOLLOWIN G CLAUSES SHALL NOT INCLUDED- 14(I) ANY SUCH SPECIAL ALLOWANCE OR BENEFIT, NOT BE ING IN A NATURE OF A PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SECT ION 17, SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EX CLUSIVELY INCURRED FOR THE PURPOSE OF THE DUTIES OF AN OFFICE OR EMPLO YMENT OF PROFIT, AS MAY BE PRESCRIBED, TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE, RULE 2BB(1) OF THE INCOME TAX RULES, INTER ALIA, PR ESCRIBES THE FOLLOWING ALLOWANCE FOR THE PURPOSE OF SECTION 10(14)(I) OF T HE ACT ANY ALLOWANCE WHETHER, GRANTED ON TOUR OR FOR THE PERIOD OF JOURN EY IN CONNECTION WITH TRANSFER, TO MEET THE ORDINARY DAILY CHARGES INCURR ED BY AN EMPLOYEE ON ACCOUNT OF ABSENCE FROM HIS NORMAL PLACE OF DUTY. IT IS PLACED ON RECORDS THAT LIVING ALLOWANCE WHICH WAS GRANTED TO THE ASSESSEE WHILE HE WAS ON TOUR AND ON DUTY IN USA WA S MADE ENABLE THE ASSESSEE TO MEET THE ORDINARY DAILY CHARGES INCURRE D BY HIM ON ACCOUNT OF ABSENCE FROM HIS NORMAL PLACE OF DUTY. HIS NORMA L PLACE OF DUTY IS KOLKATA, INDIA. HE WAS SENT TO USA BY HIS EMPLOYER TO WORK ON CERTAIN PROJECTS. LIVING ALLOWANCE WAS GRANTED TO HIM SO AS TO ENABLE HIM TO 15 MEET HIS DAILY EXPENSES IN USA LIKE EXPENSES ON ACC OMMODATION, EXPENSES ON FOOD, EXPENSES ON WASHING OF CLOTHES, E XPENSES ON CONVEYANCES AND OTHER ROUTINE EXPENSES WHICH ARE OR DINARILY INCURRED BY ANY INDIVIDUAL, WHILE ON DUTY AT A PLACE OUTSIDE HIS NORMAL PLACE OF DUTY. SUCH ALLOWANCE IS IN THE NATURE OF SUSTENANCE ALLOWANCE PAID TO THE EMPLOYEES, WHO ARE SENT ABROAD OR SENT OUT OF T HEIR NORMAL PLACE OF DUTY FOR OFFICIAL WORK TO ENABLE THEM TO SUPPORT TH EMSELVES DURING THEIR STAY ABROAD OR OUTSIDE THEIR NORMAL PLACE OF DUTY. SUCH ALLOWANCES IS PAID TO THE EMPLOYEES WHOLLY, EXCLUSIVELY AND NECES SARILY FOR ENABLING THE EMPLOYEE TO MEET THE EXPENSES WHILE THEY ARE PO STED IN ABROAD. 2.1. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSES SEES CLAIM UNDER SECTION 10(14) READ WITH RULE 2BB(1) AND, INTER ALIA, OBSERVED AS UNDER :- THE LIVING ALLOWANCE GRANTED TO THE ASSESSEE IN T HIS CASE DOES NOT FULFILL ANY OF THE CONDITIONS LAID DOWN IN RULE 2BB(1). THE ASS ESSEE HAS CLAIMED THAT THE LIVING ALLOWANCES PAID BY TCS LTD. TO ITS EMPLOYEE IN USA ARE IN THE NATURE OF DAILY ALLOWANCE TO ENABLE THEM TO MEET EXPENSES WHI CH ARE REQUIRED WHILE THEY ARE ON DUTY IN USA. HE HAS REFERRED TO INSTRUCTION NO. 1407 DATED 21.07.1981 OF THE CBDT IN SUPPORT OF HIS CONTENTION. BUT THE S AID INSTRUCTION REFERS TO ONLY THE DAILY ALLOWANCES GRANTED TO THE EMPLOYEES FOR O FFICIAL TOURS IN INDIA AND ABROAD AND STATES THAT SUCH ALLOWANCE ARE EXEMPTED ONLY TO THE EXTENT THE EXPENSES ARE ACTUALLY INCURRED IN THE PERFORMANCE O F DUTIES. THE LIVING ALLOWANCE GRANTED BY TCS LTD,. TO ITS EM PLOYEES DEPUTED TO USA IS NOT IN THE NATURE OF ANY ALLOWANCE, WHETHER GRANTED ON TOUR OR FOR THE PERIOD OF JOURNEY IN CONNECTION WITH TRANSFER, TO MEET THE OR DINARY DAILY CHARGES INCURRED BY AN EMPLOYEE ON ACCOUNT OF ABSENCE FORM HIS NORMA L PLACE OF DUTY AS SPECIFIED IN RULE 2BB(1)(B). THE ALLOWANCES REFERRE D TO IN RULE 2BB(1)(B) ARE, IN FACT, IN THE NATURE OF DAILY ALLOWANCE, TRANSFER TRAVELING ALLOWANCE AND DAILY ALLOWANCE ON TOUR ETC. AND DEFINITELY NOT LIVING AL LOWANCE AS CLAIMED BY THE ASSESSEE. THE ASSESSEE HAS FURTHER CLAIMED THAT LIV ING ALLOWANCE IS GIVEN TO THE EMPLOYEES TO MEET EXPENDITURE FOR FOOD, LODGING, AN D OTHER ESSENTIAL ROUTINE EXPENDITURES FOR DAILY LIFE IN USA AND AS SUCH THE SAME IS IN THE NATURE OF REIMBURSEMENT. THE SAID CONTENTION OF THE ASSESSEE IS ALSO NOT TENABLE AS EVIDENCE IN SUPPORT OF REIMBURSEMENT OF ACTUAL EXPE NSES COULD NOT BE PRODUCED BY THE ASSESSEE. ASSESSING OFFICER, THEREFORE, TREATED THE LIVING AL LOWANCE GRANTED TO THE ASSESSEES AS PERQUISITE WITHIN THE MEANING OF PROVISIONS OF SECTION 17(2) O F THE INCOME TAX ACT AND DENIED THE EXEMPTION CLAIMED BY ASSESSEES UNDER SECTION 10(14) OF THE ACT. HE FURTHER POINTED OUT THAT ASSESSES WERE ENTITLED TO RELIEF UNDER SECTION 90 O F THE INCOME TAX ACT ON THE INCOME TAX PAID BY THEM ON THE LIVING ALLOWANCE IN USA WITH WHOM IN DIA HAS A DOUBLE TAXATION AVOIDANCE 16 AGREEMENT (DTAA). HE, THEREFORE, ALLOWED THE TAX RE LIEF IN RESPECT OF THE TAX PAID BY THE ASSESSEES IN USA ON THE LIVING ALLOWANCE. 3. BEFORE THE LD. CIT(APPEALS), THE ASSESEE HAD, IN TER ALIA, ASSAILED THE FINDING OF ASSESSING OFFICER IN RESPECT OF HIS FINDING REGARDI NG TAXABILITY OF LIVING ALLOWANCE AND ALSO IN REGARD TO CHARGING OF INTEREST UNDER SECTION 234B. 4. AS REGARDS TAXABILITY OF LIVING ALLOWANCE, THE A SSESSEES HAD, INTER ALIA, MADE THE FOLLOWING SUBMISSIONS :- (I) LIVING ALLOWANCE WAS PAID TO ENABLE THE APPEL LANT-ASSESSEES TO MEET THE ORDINARY DAILY CHARGES INCURRED BY THEM ON ACCOUNT OF ABSENCE FROM THEIR NORMAL PLACE OF DUTY, I.E. KOLKATA, INDIA. (II) THE APPELLANTS WERE SENT TO USA BY THEIR EMP LOYER TO WORK AT CERTAIN PROJECT. (III) THE ALLOWANCE WAS PAID TO THE EMPLOYEES WHO LLY, EXCLUSIVELY AND NECESSARILY FOR ENABLING THE EMPLOYEES TO MEET THE EXPENSES WHILE THEY WERE ON TOUR. (IV) STATEMENT OF DETAILED EXPENSES INCURRED BY T HE EXECUTIVES OF TCS LTD. FOR THE PERIOD OF THEIR STAY IN USA. THE APPELLANTS HAD UTILIZED THE AMOUNT OF LIVING ALLOWANCE FOR MEETING FOODS EXPENSES, RENT, ELECTRICITY, TELEPHON E, LAUNDRY, ETC. (V) THE CASE OF THE APPELLANTS WAS NOT COVERED BY SUB-CLAUSE (II) OF CLAUSE (14) OF SECTION 10 OR RULE 2BB(2). BUT WAS COVERED BY SU B-CLAUSE (I) OF CLAUSE (14) TO SECTION 10 READ WITH RULE 2BB(1). (VI) THE APPELLANTS RELIED ON THE CBDT CIRCULAR N O. 6 OF 2004 DATED 06.12.2004 AND SIMILAR CIRCULARS IN THE OTHER FINANCIAL YEARS THAT DEAL WITH THE SUBJECT OF DEDUCTION OF INCOME TAX AT SOURCE FROM SALARIES UNDER SECTION 19 2 OF THE ACT. (VII) THE APPELLANTS RELIED ON THE INSTRUCTION NO . 1407 OF CBDT DATED 21.07.2001 IN WHICH THE CBDT CLARIFIED THAT ALLOWAN CES GIVEN BY EMPLOYER WITHIN THE CENTRAL 17 AND STATE GOVERNMENT WHETHER ON OFFICIAL TOURS IN I NDIA OR ABROAD, THE RELEVANT PROVISION IS IN SECTION 10(14). (VIII) AS REGARDS THE MANDATE OF SECTION 10(14)(I ) THAT ALLOWANCES ARE EXEMPT TO THE EXTENT OF EXPENSES INCURRED BY THE APPELLANTS, IT WAS SUBMITTED THAT IN COURSE OF ASSESSMENT, ASSESSING OFFICER NEVER ASKED THE APPELLANTS TO GIV E DETAILS OF EXPENSES INCURRED FOR THE PURPOSE FOR WHICH LIVING ALLOWANCE WAS GRANTED. (IX) THE APPELLANTS RELIED ON THE CBDTS INSTRUCT ION NO. 1801/CBDT DATED 07.11.2008 IN CONNECTION WITH THE FOREIGN NATIONALS COMING TO INDIA FOR TRAINING IN VARIOUS COURSES OF STUDY UNDER THE TECHNICAL COOPERATION SC HEMES OF COLOMBO PLAN AND ITS SPECIAL COMMONWEALTH AFRICAN ASSISTANCE PLAN. IN THIS CIRCU LAR, THE BOARD HAS CLARIFIED THAT THE LIVING ALLOWANCE PAID TO THE FOREIGN NATIONALS COMING FOR TRAINING IN THE COURSE OF STUDY UNDER THE AFORESAID PROGRAMME AT THE ENHANCED RATE, MAY BE TR EATED AS EXEMPTED UNDER SECTION 10(14) /10(16) UPTO THE ASSESSMENT YEAR 1988-89. THE ASSESSEES RELIED ON THE FOLLOWING DECISIONS :- (A) HINDUSTHAN POWER PLUS LIMITED [271 ITR 433 (A AR)]; (B) CIT VS.- GOSLINO MARIO [241 ITR 312 (SC)]; (C) CIT VS.- MORGENSTERN WERNER [259 ITR 486 (SC )]; (D) CIT VS.- SHIGERUBABA [242 ITR 592 (MAD); (E) MADHAVRAO J. SCHINDIA VS.- CIT [243 ITR 683 (BOM.)], (F) CIT VS.- HANS BEER [2007-TIOL-308-SCH-DEL-IT ] (G) MADANLAL MOHANLAL NARANG [2007-TIOL-97-ITAT-M UM.). ALTHOUGH THE DECISIONS CITED ABOVE RELATE TO ELIGI BILITY OF EXEMPTION UNDER SECTION 10(14(I) TO NON-RESIDENTS WHILE PERFORMING THEIR DUTIES IN INDI A, THE PRINCIPLE LAID DOWN IN THE ABOVE REFERRED CASES AND THE RULING OF THE AAR ARE EQUALL Y APPLICABLE TO AN ASSESSEE, WHO IS RESIDENT IN INDIA AND WORKS ABROAD IN CONNECTION WITH HIS AS SIGNMENT GIVEN BY HIS EMPLOYER. (X) APPELLANTS COMPANY RELIED ON THE DECISION OF TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.- INFORMATION ARCHITECT [2010-TIOL-141-H C-MUM-IT DATED 09.02.2010, WHEREIN THE CASE WAS OF A RESIDENT INDIAN SENT TO A FOREIGN COUNTRY ON DEPUTATION. IT WAS HELD THAT ANY 18 SURPLUS ARISING OUT OF LIVING ALLOWANCE FOR MEETING THE EXPENDITURE ON LODGING AND BOARDING WAS NOT LIABLE TO INCOME TAX. (XI) LIVING ALLOWANCE WAS EXEMPT IN THE HANDS OF T HE EMPLOYEES UNDER SECTION 10(14) BUT THE SAME WAS LIABLE TO FRINGE BENEFIT TAX IN TH E HANDS OF THE EMPLOYER. IN ANSWERING IN QUESTION NO. 79, THE BOARD HAS CLARIFIED THAT SUCH ALLOWANCES WILL BE EXEMPT IN THE HANDS OF THE EMPLOYEES AND THAT THE EMPLOYER WILL BE LIABLE TO FBT ON THE SAME. AS REGARDS TDS OF EXPENSES ACTUALLY INCURRED, THE APPELLANTS REFERRED TO CBDT CIRCULAR NO. 33(LXXVI-5) DATED 1.8.1955, WHEREIN IT HAS BEEN CLARIFIED THAT WHERE SPECIFIC ALLOWANCES ARE REASONABLE WITH REFERENCE TO THE NAT URE OF THE DUTIES PERFORMED BY THE ASSESSEES AND ARE NOT DISPROPORTIONATELY HIGH COMPARED TO THE SALARY RECEIVED BY HIM, NO ATTEMPT WILL ORDINARILY BE MADE TO CALL FOR DETAILS OF EXPENSES ACTUALLY INCURRED BY HIM WITH A VIEW TO DISENTITLING HIM TO SOME EXTENT FROM THE EXEMPTION. IN THIS REGARD, APPELLANTS RELIED ON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF MADAN LAL MOHANLAL NARANG VS.- ACIT [2007- TIOL-97-ITAT-MUM)]. (XII). AS REGARDS THE CONTROVERSY WHETHER THE APPEL LANTS WERE ON TOUR OR TRANSFER FROM KOLKATA TO USA, ASSESSEES POINTED OUT THAT THEY WER E DEPUTED BY THE EMPLOYER TCS LTD. IN USA DEPENDING UPON THE EXPERIENCE, KNOWLEDGE AND SK ILL. THEY REMAINED ON THE PAY ROLL OF TCS LTD., KOLKATA. SALARY AND OTHER ALLOWANCES WERE ALL PAID BY TCS LTD., KOLKATA. APPELLANTS WERE NOT TRANSFERRED FROM TCS, KOLKATA T O TCSS BRANCH OFFICES IN USA. THE APPELLANTS CONTENDED THAT IF THEY WERE TRANSFERRED FROM TCS, KOLKATA TO USA, THE FORM NO. 16 I.E. CERTIFICATE UNDER SECTION 203 FOR TDS FROM SAL ARY, WOULD HAVE INDICATED BASE BRANCH AS TCS-USA. HOWEVER, IN FORM NO. 16, TCS, KOLKATA WAS, THEREFORE, SHOWN AS BASE BRANCH OF EACH APPELLANT IMPLYING THAT THERE WAS NO TRANSFER TO USA.. (XIII) THE PERIOD FOR WHICH THE APPELLANTS WERE ON DEPUTATION DOES NOT ALTER THE POSITION. EVEN IF SOME OF THE APPELLANTS WERE ON DEPUTATION FOR MO RE THAN 12 MONTHS, THE FACT REMAINS THAT THEY WERE ON DEPUTATION ON FOREIGN PROJECTS AND WER E NOT TRANSFERRED TO THE USA BRANCHES OF TCS LIMITED. 19 (XIV) THE TERM DEPUTATION IN THIS CONTEXT, DOES N OT MEAN TRANSFER OF EMPLOYEE FROM ONE PLACE OF DUTY TO ANOTHER PLACE OF DUTY. RATHER THE PERSON S SHOULD BE CONSIDERED TO BE ON TOUR IN CONNECTION WITH OFFICIAL ASSIGNMENT. (XV) IN SUPPORT OF CONTENTION THAT PERIOD OF STAY D OES NOT DECIDE WHETHER IT IS TOUR OR TRANSFER, THE APPELLANTS RELIED ON THE DECISION OF THE HONBL E KOLKATA HIGH COURT IN THE CASE OF CIT VS.- KULASINGHEE A. HARITH [107 CTR 328], WHEREIN D EPUTATION FOR A PERIOD OF 231 DAYS WAS TREATED AS TOUR. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS.- D.S. BLACKWOOD [178 ITR 470]. 5. THUS, IT WAS SUBMITTED THAT QUANTUM OF LIVING AL LOWANCE AND MANNER OF PAYING SUCH ALLOWANCE DOES NOT DECIDE THE ALLOWABILITY OR OTHER WISE OF THE EXEMPTION UNDER SECTION 10(14)(I) READ WITH RULE 2BB(1)(B). 6. BEFORE LD. CIT(APPEALS), THE ASSESSEES HAD ALSO ASSAILED THE FINDING OF ASSESSING OFFICER IN RESPECT OF CHARGING OF INTEREST UNDER SE CTION 234B RELYING ON THE DECISION OF ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF SUMIT BHATTACH ARYA VS.- ACIT [300 ITR (AT) 347 (MUM.)(SB). 7. AS REGARDS THE TAXABILITY OF LIVING ALLOWANCE IN THE HANDS OF THE APPELLANTS, LD. CIT(APPEALS) DECIDED THE ISSUE AGAINST THE APPELLAN TS. HOWEVER, AS REGARDS CHARGING OF INTEREST UNDER SECTION 234B, HE ALLOWED THE ASSESSEES APPEAL S. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(APPEALS), BOTH THE ASSESSEES AND DEPARTMENT ARE IN APPEALS BEFORE THE TRIBUNAL. 8. WE FIRST TAKE UP THE ASSESSEES APPEALS. LD. CIT (APPEALS) EXAMINED EACH AND EVERY PLEA RAISED BEFORE HIM AND DECIDED THE ISSUE AS UND ER :- IN REGARD TO ASSESSEES SUBMISSION THAT THE ASSESSE ES WERE POSTED IN USA ON SPECIFIC PROJECT AND, THEREFORE, THEY WERE ON TOUR DUTY TO T HAT COUNTRY AND THE LIVING ALLOWANCE WAS PAID TO THEM TO MEET ORDINARY DAILY CHARGES ON ACCOUNT O F BEING AWAY FROM NORMAL PLACE OF DUTY WHICH WAS KOLKATA, INDIA AND, THUS, THESE ALLOWANCE S WERE PAID WHOLLY, EXCLUSIVELY AND NECESSARILY FOR ENABLING THEM TO MEET THE EXPENSES WHILE ON TOUR TO USA, LD. CIT(APPEALS) HELD THAT THE ASSESSEES WERE REQUIRED TO RESIDE IN USA FULL TIME AND THEY SHIFTED THEIR RESIDENCE 20 AND FAMILY FROM INDIA TO THAT COUNTRY. THEIR HEADQU ARTERS HAD BEEN SHIFTED FROM KOLKATA TO USA WHEN THE EMPLOYEE IS GIVEN A PROPOSAL TO GO TO THE USA ON DEPUTATION. IT IS NOT COMPULSORY FOR HIM TO GO. HE HAD A CHOICE TO SAY NO ALSO. IF IT IS AN OFFICIAL TOUR, THE EMPLOYEE CANNOT REFUSE AS IT IS PART OF HIS DUTY. THE EMPLO YEE WORKED UNDER THE SUPERVISION OF THE INCHARGE OF USA AND NOT IN INDIA. THE AGREEMENT WHI CH WAS SIGNED BETWEEN THE EMPLOYEE AND TCS FOR DEPUTATION TO USA WAS INITIALLY MADE FOR A LONG PERIOD. HE ALSO STAED THAT THE HEADQUARTER AND THE NORMAL PLACE OF DUTY OF ASSESSE ES WERE CHANGED FROM INDIA TO USA AND HELD THAT THE LIVING ALLOWANCE RECEIVED BY THE APPE LLANT-ASSESSEES IN THE USA CANNOT BE EXEMPT UNDER RULE 2BB(1). LD. CIT(APPEALS), THEREFORE, HEL D THAT APPELLANTS COULD NOT BE TREATED ON TOUR TO USA. 9. IN REGARD TO CBDTS CIRCULAR, LD. CIT(APPEALS) P OINTED OUT THAT CBDT RECOMMENDED THAT ALLOWANCES RECEIVED DURING TOUR SHOULD BE TREA TED AS EXEMPT UNDER SECTION 10(14) AND NOT WITH REFERENCE TO DEPUTATION TO USA AS IN THE PRESE NT CASE. APPELLANTS HAD NOT SUBMITTED ANY BILLS/ VOUCHERS OR ANY CLAIM FOR GETTING THE PAYMEN T. THE ALLOWANCE WAS GIVEN TO THE EMPLOYEES LIKE NORMAL SALARY AND THEY WERE NOT REQU IRED TO GIVE ANY ACCOUNT TO THE EMPLOYER FOR THE EXPENDITURE MADE OUT OF IT AND, THEREFORE, IS NOT IN THE NATURE OF REIMBURSEMENT OF EXPENSES. THE DECISION OF AUTHORITY FOR ADVANCE RUL ING IN THE CASE OF HINDUSTAN POWER PLUS LIMITED [271 ITR 433 (AIR)] WERE WITH REFERENCE TO NON-RESIDENT AND WERE FOR THE PERIOD PRIOR TO 1.4.1989 AFTER WHICH THE PROVISIONS OF SECTION 1 0(14) HAVE BEEN CHANGED SUBSTANTIALLY AND NOW FOR ASSESSMENT YEAR 2006-07 ALLOWANCES AS PROVI DED IN RULE 2BB ONLY ARE EXEMPT. THE LIVING ALLOWANCE RECEIVED BY THE ASSESSEE DOES NOT FALL UNDER RULE 2BB(1) AND RULE 2BB(2). LD. CIT(APPEALS) HELD THAT THE LIVING ALLOWANCE WAS COVERED UNDER SECTION 2(24)(IIIB) AND ACCORDINGLY HELD THAT EXEMPTION WAS AVAILABLE UNDER SECTION 10(14)(II) OF THE ACT. HOWEVER, SINCE IT WAS NOT COVERED UNDER RULE 2BB(II), NO EXE MPTION WAS ADMISSIBLE. 10. AS REGARDS THE DECISION OF THE HONBLE BOMBAY H IGH COURT IN THE CASE OF INFORMATION ARCHITECT (SUPRA), LD. CIT(APPEALS) POINTED OUT THA T THE SAME IS WITH REFERENCE TO AN EMPLOYER AND NOT AN EMPLOYEE. FURTHER, THE SAID DECISION HAS BEEN GIVEN IN RESPECT OF SECTION 40(A)(III) AND NOT IN RESPECT OF SECTION 2(24) AND SECTION 10( 14). AS REGARDS RELIANCE PLACED BY THE ASSESSEE ON CBDT CIRCULAR ON FBT, LD. CIT(APPEALS) POINTED OUT THAT THE SAME RELATED TO PART TIME ALLOWANCE GIVEN TO EMPLOYEES DURING TOUR, WHIC H IS NORMALLY EXEMPT UNDER SECTION 21 10(14). THIS CIRCULAR WAS, THEREFORE, NOT APPLICABL E TO THE FACTS OF THE CASE. AS REGARDS RELIANCE PLACED ON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF MADANLAL MOHANLAL NARANG VS.- ACIT, LD. CIT(APPEALS) POINTED OUT THAT THE SA ME IS NOT RELEVANT BECAUSE THE LIVING ALLOWANCE IS NOT AN ALLOWANCE SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY FOR THE PERFORMANCE OF DUTIES OF AN OFF ICE OF EMPLOYMENT OF PROFIT AND, THEREFORE, THE QUESTION OF ALLOWING EXPENDITURE WHICH ARE INCU RRED DOES NOT ARISE AT ALL. AS REGARDS ASSESSEES CONTENTION THAT THEY HAD NOT BEEN TRANSF ERRED FROM KOLKATA TO USA, LD. CIT(APPEALS) OBSERVED THAT IN THE CONVENTIONAL SENS E THAT MAY BE SO BUT THE FACT WAS THAT HEADQUARTERS HAD BEEN TEMPORARILY SHIFTED FROM KOLK ATA TO USA WHERE HE WORKS ON A PROJECT. HE POINTED OUT THAT THE DEPUTATION OF ASSESSEES TO THE USA MAY NOT BE A FULL FLEDGED TRANSFER BUT IT WAS NOT A TOUR AT ALL. LD. CIT(APPEALS) REFE RRED TO THE DEPUTATION AGREEMENT AND POINTED OUT THAT AS PER THE DEFINITION OF DEPUTATION CONTAI NED IN THE AGREEMENT, DEPUTATION EMPLOYEES SHIFTED ALL THEIR PERSONAL ESTABLISHMENTS TO USA. T HEY HAD GONE THERE WITH THEIR FAMILY AND WERE LIVING THERE BY RENTING HOUSE. HE ACCORDINGLY HELD THAT THE LIVING ALLOWANCE RECEIVED BY THE ASSESSEES FROM THEIR EMPLOYER TCS LTD. WAS A PA RT OF THEIR INCOME AND WAS NOT EXEMPT UNDER SECTION 10(14). 11. SHRI BAJORIA, LD. SENIOR COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE DEPUTATION AGREEMENT HAD BEEN ENTERED INTO BETWEEN TCS LTD. AN D ITS EMPLOYEES. COMPANY OBTAINED VISA ON THE BASIS OF DEPUTATION AGREEMENT. SHRI BAJORIA SUBMITTED THAT IN VIEW OF THE PROVISIONS CONTAINED UNDER SECTION 2(24)(IIIA) AND 2(24)(IIIB) , THERE IS NO DISPUTE THAT THE LIVING ALLOWANCE WAS INCOME OF ASSESSEE. HOWEVER, THE SAID INCOME WA S EXEMPT UNDER SECTION 10(14)(I) READ WITH RULE2BB(1) BECAUSE ALLOWANCE WAS SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY IN THE PERFORMANCE OF D UTIES OF TCS LTD. SHRI BAJORIA, LD. SR. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEES ARE NO T CLAIMING EXEMPTION UNDER SECTION 10(14)(II). THUS THE ISSUE IN THE PRESENT APPEALS I S WHETHER LIVING ALLOWANCE FALL WITHIN SECTION 10(14(I) READ WITH RULE 2BB(1)(B) OR NOT. LD. COUNS EL REFERRED TO SECTION 10(14)(I) AND RULE 2BB(1)(B), WHICH ARE REPRODUCED HEREUNDER :- SECTION 10(14)(I) : ANY SUCH SPECIAL ALLOWANCE OR BENEFIT, NOT BEING IN THE NATURE OF A PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SECTION 17, SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECES SARILY AND EXCLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFF ICE OR EMPLOYMENT OF PROFIT, AS MAY BE PRESCRIBED, TO THE EXTENT TO WHICH SUCH E XPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. 22 RULE 2BB(1)(B) : ANY ALLOWANCE, WHETHER, GRANTED ON TOUR OR FOR T HE PERIOD OF JOURNEY IN CONNECTION WITH TRANSFER, TO MEET THE OR DINARY DAILY CHARGES INCURRED BY AN EMPLOYEE ON ACCOUNT OF ABSENCE FROM HIS NORMAL PLACE OF DUTY. 12. WITH REFERENCE TO THE ABOVE PROVISIONS, SHRI BA JORIA, LD. SENIOR COUNSEL SUBMITTED THAT THE MAIN ISSUE TO BE DECIDED IS WHETHER THE EMPLOYE ES COULD BE TREATED ON TOUR OR NOT IN VIEW OF THE TERMS OF DEPUTATION. HE SUBMITTED THAT IN TH E PRESENT CASE, THE COMPANY HAD PAID LUMPSUM AMOUNT TO ITS EMPLOYEES TO MEET THE ORDINAR Y DAILY CHARGES ON ACCOUNT OF ABSENCE FROM HIS NORMAL PLACE OF DUTY IN INDIA. LD. SR. COU NSEL FURTHER REFERRED TO THE DEPUTATION AGREEMENT AND POINTED OUT THAT DEPUTATION IS PROJEC T SPECIFIC. HE FURTHER SUBMITTED THAT NO DOUBT DURATION AS SUCH CAN BE A CRITERIA FOR DECIDI NG WHETHER THE EMPLOYEES WERE SENT ON TOUR OR NOT. HOWEVER, THE RELEVANCY OF THE SAME IS TO BE JUDGED WITH RESPECT TO ASSIGNMENT. HE SUBMITTED THAT ONE MORE CRITERIA FOR DECIDING WHETH ER THE EMPLOYEES WERE ON TOUR OR NOT IS TO EXAMINE WHETHER THE PLACE OF WORK HAD BEEN SHIFTED OR NOT. LD COUNSEL POINTED OUT THAT IN THE PRESENT CASE, LIVING ALLOWANCE HAS BEEN PAID AS A C OMPENSATION FOR NOT WORKING AT NORMAL PLACE OF WORKING. HE REFERRED TO PAGE 13 OF THE PAPER BOO K FILED IN THE CASE OF TARUN BANDHOPADHYAY AND OTHERS AND POINTED OUT THAT IN THE WRITTEN SUBM ISSION FILED BEFORE THE LD. CIT(APPEALS), IT WAS POINTED OUT THAT IN THE CASE OF HINDUSTHAN POWE R PLUS LTD.[271 ITR 433 (AAR), THE AUTHORITY FOR ADVANCE RULING PRONOUNCED THE RULING IN CASE OF A NON-RESIDENT FOLLOWING THE ESTABLISHED LAW THAT SINCE THE NON-RESIDENT WAS AWA Y FROM HIS HEADQUARTERS WHILE SERVING IN INDIA, LIVING EXPENSES AND THE VALUE OF FACILITIES ENJOYED DURING SERVICE IN INDIA WOULD BE ELIGIBLE FOR EXEMPTION UNDER SECTION 10(14) OF THE ACT. LD. COUNSEL FURTHER REFERRED TO PAGE 17 OF THE PAPER BOOK, WHEREIN IN THE WRITTEN SUBMISSIO N, THE DECISION IN THE CASE OF MADANLAL MOHANLAL NARANG VS.- ACIT [2007-TIOL-97-ITAT-MUM H AS BEEN REFERRED TO IN WHICH TRIBUNAL HAS HELD THAT IN VIEW OF CBDT CIRCULAR NO. 01.08.1955, IT WAS NOT OPEN TO THE REVENUE TO CALL FOR THE DETAILS OF EXPENSES ACTUALL Y INCURRED UNLESS THE SPECIFIC DISALLOWANCES WERE DISPROPORTIONATELY HIGH COMPARED TO THE SALARY RECEIVED BY THEM OR UNREASONABLE WITH REFERENCE TO THE NATURE OF THE DUTIES PERFORMED BY THE ASSESSEE. LD. SENIOR COUNSEL SUBMITTED THAT ASSESSING OFFICER TREATED THIS LIVING ALLOWANC E AS PERQUISITE UNDER SECTION 17(2) AND LD. CIT(APPEALS) TREATED THE SAME AS INCOME UNDER SECTI ON 2(24)(IIIB) AND ACCORDINGLY, HELD THAT ASSESSEES WERE ELIGIBLE FOR EXEMPTION UNDER SECTION 10(14(II) READ WITH RULE 2BB(II). IN THE COURSE OF HEARING, LD. SENIOR COUNSEL FILED BEFORE US THE REPLY OF TCS LTD. DATED 09.09.2011REGARDING TREATMENT OF FBT ON LIVING ALLO WANCE PAID TO MR. BASUDEV ACHARYA FOR 23 THE ASSESSMENT YEAR 2006-07 TO EXPLAIN WHY FBT WAS NOT PAID BY TCS LTD. ON LIVING ALLOWANCE.. LD. SR. COUNSEL ON THE BASIS OF INSTRUC TION FURTHER SUBMITTED THAT THE DEPARTMENT HAS NOT INITIATED ANY TDS PROCEEDING AGAINST TCS LTD. L D. COUNSEL FURTHER SUBMITTED THAT SALARY STRUCTURE OF THE EMPLOYEES HAD NOT CHANGED ON ACCOU NT OF POSTING TO USA AND ONLY ALLOWANCE WAS GRANTED. HE POINTED OUT THAT ALLOWANCE WAS NOT PAID AS PER USA STANDARD. IN SUM AND SUBSTANCE, THE SUBMISSIONS OF THE LD. SENIOR COUNSE L ARE AS UNDER :- (I) THE EMPLOYEES WERE NOT SENT BY WAY OF TRANSFER AND SALARY PAY STRUCTURE REMAINED SAME ON DEPUTATION. (II) ALL BENEFITS WERE ENJOYED BY THE EMPLOYEES AS IF TH EY WERE TCS EMPLOYEES IN INDIA. (III) NO CHANGE WAS AFFECTED IN SERVICE CONDITION ON DEPU TATION; (IV) LIVING ALLOWANCE PAID BY WAY OF REIMBURSEMENT ONLY; (V) LIVING ALLOWANCE WAS PAID FOR MEETING PERSONAL EXPE NSES; (VI) THE AMOUNT WAS PAID FOR PERFORMING DUTIES CONNECTED WITH THE OFFICE; (VII) THE AMOUNT WAS GIVEN TO MEET ADDITIONAL COST OF LIV ING ON ACCOUNT OF BEING AWAY FROM NORMAL PLACE OF DUTY. 12.1. LD. SENIOR COUNSEL FURTHER REFERRED TO PAGE 5 6 OF THE PAPER BOOK IN THE CASE OF TARUN BANDYOPADHYAY, WHEREIN INSTRUCTION NO. 1801/CBDT DA TED 07.11.1988 ARE CONTAINED WHERE IT WAS CLARIFIED THAT LIVING ALLOWANCE PAID TO FOREIGN NATIONALS COMING TO ILNDIA FOR TRAINING IN VARIOUS COURSES OF STUDY UNDER THE TECHNICAL COOPER ATION SCHEMES OF COLOMBO PLAN AND THE SPECIAL COMMON-WEALTH AFRICAN ASSISTANCE PLAN (SCAA P) WAS EXEMPTED UNDER SECTION 10(14)/10(6) OF THE INCOME TAX ACT, 1961 UPTO THE A SSESSMENT YEAR 1988-89. AFTER ASSESSMENT YEAR 1988-89, THE EXEMPTION IS TO BE GOVERNED, INTE R ALIA, BY THE NEW PROVISIONS OF SECTION 10(140/(I)(II) AS SUBSTITUTED BY THE DIRECT TAX LAW S (AMENDMENT) ACT, 1987 WITH EFFECT FROM 1.4.1989. LD. SENIOR COUNSEL FURTHER REFERRED TO TH E CIRCULAR NO. 701/1995 DATED 23.03.1995 CONTAINED AT PAGES 57 TO 60 OF THE PAPER BOOK, WHER EIN IT HAS BEEN CLARIFIED AS UNDER :- IT IS CLARIFIED THAT CONSEQUENT TO THE AMENDMENT O F SECTION 10(14) BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 (WITH EFF ECT FROM 01.04.1989), ALL CIRCULARS, INSTRUCTIONS AND CLARIF ICATIONS ISSUED BY THE BOARD REGARDING SECTION 10(14) UPTO 31.03.1989 CEAS ED TO HAVE EFFECT FROM THE ASSESSMENT YEAR 1989-90 AND ONWARDS. 24 LD. SENIOR COUNSEL SHRI BAJORIA REFERRED TO THE DEC ISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- MR. HANS BEER, WHEREIN THE HONBL E DELHI HIGH COURT HAS OBSERVED AS UNDER :- IF THE AMOUNT PAID BE A KIND OF REIMBURSEMENT FOR AN EXPENDITURE INCURRED FOR THE PERFORMANCE OF THE DUTIEIS OF THE ASSESSEE, THE SAME WOULD NOT BE LIABLE TO BE TAXED AS SALARY. IN THOSE CASES, AS WELL AS IN THE PRESENT CASE, THE ASSESSEE WERE FOREIGN TECHNIC IANS AND WERE REQUIRED TO STAY AWAY FROM THEIR HOMES AND CONSEQUE NTLY THE DAILY ALLOWANCE GIVEN TO THEM WAS RELATED TO THE EXTRA EX PENDITURE THAT THEY WERE REQUIRED TO UNDERTAKE ON FOOD, ETC. WHICH WAS WHOLLY, NECESSARILY AND EXCLUSIVELY FOR THE PURPOSE OF THE DUTIES, AND AS SUCH IT WAS IN THE NATURE OF REIMBURSEMENT WHICH WOULD BE EXCLUDED FRO M THE NET CAST BY THE ACT. SHRI BAJORIA, LD. SENIOR COUNSEL FURTHER REFERRED T O THE DECISION OF ITAT, MUMBAI IN THE CASE OF MADANLAL MOHANLAL NARANG IN ITA NO. 5561 & 5570/MUM ./2002 FOR THE ASSESSMENT YEARS 1997-98 AND 1998-99. LD. SENIOR COUNSEL FURTHER REF ERRED TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.- M/S. INF ORMATION ARCHITECTS [2010-TIOL-141- HC-MUM-IT, WHEREIN IT HAS BEEN HELD THAT IN VIEW OF SECTION 40(A)(III), THE SUM PAID TO THE EMPLOYEE AS OVERSEAS MAINTENANCE ALLOWANCE CONSTITU TES ONLY REIMBURSEMENT INCURRED BY THE EMPLOYEES PER DAY AND THE SAME WOULD NOT FORM PART OF THE SALARY IN THE HANDS OF THE RECIPIENTS. IN THAT CASE, IT HAS BEEN OBSERVED BY T HE HONBLE BOMBAY HIGH COURT THAT IN PARA 17 AS UNDER :- 17. IN SO FAR AS THE SECOND ISSUE IS CONCERNED, IT RELATES TO THE AMOUNTS PAID BY THE ASSESSEE TO ITS EMPLOYEES TOWARDS OVERS EAS MAINTENANCE ALLOWANCE. THESE AMOUNTS WERE PAID TOWARDS EXPENSES AT THE RATE OF IEP 50 PER DAY PER EMPLOYEE. THE TRIBUNAL HAS CORRECTLY HE LD THAT THESE AMOUNTS CONSTITUTE ONLY REIMBURSEMENT FOR THE EXPENSES INCU RRED BY THE EMPLOYEES AT A PARTICULAR AMOUNT PER DAY AND WOULD NOT FORM PART O F THE SALARY IN THE HANDS OF THE RECIPIENTS. HENCE, THE QUESTION OF APPLYING SUB-CLAUSE (III) OF SUB- SECTION (A) OF SECTION 40 WOULD NOT ARISE. THE VIEW OF THE TRIBUNAL IS CORRECT AND WOULD NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW . 12.2. LD. SENIOR COUNSEL FURTHER REFERRED TO THE HO NBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS.- KULASINGHEE A. HARITH [107 CTR 328], WHER EIN, INTER ALIA HELD AS UNDER :- THE RENT-FREE ACCOMMODATION PROVIDED TO THE ASSESS EE BY HIS EMPLOYER WAS EXEMPT UNDER SECTION 10(14) OF THE INCOME TAX A CT ON THE SELF SAME REASON GIVEN BY THE MADRAS HIGH COURT IN VIEW OF TH E DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF ADDL. CIT VS.- BRAKES INDIA LTD. (1979) 118 ITR 820. 25 LD. SENIOR COUNSEL REFERRED TO THE DECISION OF AUTH ORITY FOR ADVANCE RULINGS IN THE CASE OF HINDUSTAN POWERPLUS LIMITED REPORTED IN 271 ITR 433 . IN THIS CASE ONE OF THE ISSUE WAS REGARDING EXEMPTION UNDER SECTION 10(14) IN RESPECT OF LIVING EXPENSES OF RS.35,000/- PER MONTH. FACTS WERE THAT MR. STEVEN D. DICKINSON, TEC HNICIAN, WAS DEPUTED BY CATERPILLAR-USA. THE TECHNICIAN WAS INTER ALIA PROVIDED LIVING EXPEN SES OF RS.35,000/- PER MONTH AND CLAIMED AS EXEMPT UNDER SECTION 10(14)(I). IN THIS REGARD, LD. SENIOR COUNSEL FURTHER REFERRED TO PAGE 82 OF PAPER BOOK, INTERNAL PAGE 437 TO DEMONSTRATE THA T THE PERIOD OF STAY WAS CONSIDERABLE EVEN UPTO 307 DAYS. SHRI BAJORIA SUBMITTED THAT AFTER C ONSIDERING THE PROVISIONS OF VARIOUS CASE LAWS, AUTHORITY OF ADVANCE RULINGS ACCEPTED THE CON TENTION OF APPLICANTS AND HELD THAT THE AMOUNTS SPECIFIED IN THE QUESTIONS WERE NOT TAXABLE IN INDIA. LD. COUNSEL FURTHER REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS.- GOSLINO MARIO AND OTHERS [241 ITR 312], WHEREIN ENTIRE AMOUNT OF SALARIES AND ALL OWANCES PAID BY THE INDIAN COMPANY TO ITALIAN COMPANY FOR SERVICES RENDERED BY ASSESSEE, A FOREIGN TECHNICIAN DEPUTED TO THE FERTILIZER CORPORATION OF INDIA LTD. BY THE ITALIAN CONCERN, I N TERMS OF THE AGREEMENT BETWEEN THE FERTILIZER CORPORATION OF INDIA AND THE ITALIAN CON CERN, WAS HELD TO BE NOT ASSESSABLE IN THE HANDS OF THE FOREIGN TECHNICIAN. SHRI BAJORIA FURTH ER REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT & ANOTHER VS.- MO RGENSTERN WERNER REPORTED IN 259 ITR 486, WHEREIN IT HAS BEEN HELD THAT DAILY EXPENSES R ECEIVED FOR SERVICES IN INDIA BY FOREIGN TECHNICIAN IS EXEMPT UNDER SECTION 10(14) OF THE AC T. LD. SENIOR COUNSEL ALSO RELIED ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CA SE OF CIT VS.- SHIGERU BABA REPORTED IN 242 ITR 592, WHEREIN IT WAS HELD THAT THE AMOUNTS R EIMBURSED RELATED TO EXPENSES WHICH WERE WHOLLY, NECESSARILY AND EXCLUSIVELY INCURRED FOR TH E PURPOSE OF DUTIES WHICH THE ASSESSEE WAS REQUIRED TO PERFORM IN INDIA AND, THEREFORE, WOULD BE EXEMPT FROM TAX UNDER SECTION 10(14) OF THE INCOME TAX ACT, 1961. THE AMOUNT SPENT ON REIMB URSEMENT OF DAILY EXPENSES AND OUT OF POCKET EXPENSES OF THE FOREIGN TECHNICIAN WAS EXEMP T UNDER SECTION 10(14). LD. SENIOR COUNSEL FURTHER RELIED ON THE DECISION OF THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF MADHAVRAO J. SCINDIA VS.- CIT REPORTED IN 243 ITR 683, WHEREIN IT HAS BEEN HELD THAT SINCE ASSESSEE RECEIVED DAILY ALLOWANCE FOR PERFORMING DUTIES OF H IS OFFICE AS DIRECTOR THE SAME COULD NOT BE CLAIMED EXEMPT UNDER EXPLANATION TO SECTION 10(14) OF THE INCOME TAX ACT 26 12.3. SHRI BAJORIA, LD. SENIOR COUNSEL FURTHER CLAR IFIED THAT ASSESSEES WERE NOT ENTITLED TO TAKE ANY OTHER JOB IN USA AND FURTHER ASSESSEES WERE NOT ABSORBED IN USA OFFICE ALSO. 12.4. LD. SENIOR COUNSEL FOR THE ASSESSEES FURTHER FAIRLY SUBMITTED THAT IN CASE IT IS HELD THAT LIVING ALLOWANCE WAS EXEMPT UNDER SECTION 10(14(I), THEN THE ASSESSEES CANNOT AVAIL TAX CREDIT IN RESPECT OF TAX PAID IN USA ON LIVING ALLOWANCE B ECAUSE DTAA IS APPLICABLE ONLY WHERE A PARTICULAR RECEIPT IS TAXABLE IN BOTH THE COUNTRIES . 13. LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE RELIED ON THE ORDER OF LD. CIT(APPEALS). HE SUBMITTED THAT SINCE THE LIVING AL LOWANCE WAS GIVEN AS PERSONAL EXPENSES, THEREFORE, IT WAS COVERED UNDER SECTION 10(14)(II) AND NOT UNDER SECTION 10(14(I) OF THE ACT. HE FURTHER SUBMITTED THAT ASSESSEES COULD CLAIM EXEMPT ION TO THE EXTENT PROVIDED UNDER RULE 2BB(2), BUT LIVING ALLOWANCE IS NOT COVERED UNDER T HE SAID RULE. LD. DR FURTHER SUBMITTED THAT THE ASSESSEES GOT HIGHER BENEFIT ON ACCOUNT OF POST ING AT USA AND THEY MUST HAVE SAVED SOMETHING. THEREFORE, UNLESS THE DETAILS OF AMOUNT ACTUALLY SPENT BY THEM WERE AVAILABLE, IN ANY VIEW OF THE MATTER, EXEMPTION COULD NOT BE GRAN TED UNDER SECTION 10(14)(I). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE F ACTS ARE NOT DISPUTED. THE ASSESSEES HAVE BEEN PAID LIVING ALLOWANCES IN TERMS OF DEPUTA TION AGREEMENT BETWEEN TCS LTD. AND ASSESSEES. THE DEPUTATION ALLOWANCE HAS BEEN TAXED IN USA. THE ASSESSEES HAD RECEIVED LIVING ALLOWANCE FROM TCS LTD. AND HAD CLAIMED EXEMPTION U NDER SECTION 10(14)(I). BEFORE CONSIDERING THE NATURE OF LIVING ALLOWANCE, IT WILL BE USEFUL TO ADVERT TO THE DEFINITION OF INCOME IN SECTION 2(24) OF THE INCOME TAX ACT. SECT ION 2(24) DEFINES INCOME AND START WITH PHRASE INCOME INCLUDES. THUS, IT IS AN INCLUSIVE DEFINITION. THE DEFINITION ENCOMPASSES WITHIN ITS AMBIT VARIOUS CATEGORIES OF RECEIPTS, WHICH HAV E BEEN TREATED AS INCOME UNDER THE INCOME TAX ACT. IN THE PRESENT CONTEXT, WE ARE PRIMARILY C ONCERNED WITH SECTION 2(24)(IIIA) AND (IIIB), WHICH READS AS UNDER :- 2(24(IIIA) :- ANY SPECIAL ALLOWANCE OR BENEFIT, OTHER THAN PERQU ISITE INCLUDED UNDER SUB-CLAUSE (III), SPECIFICALLY GRANT ED TO THE ASSESSEE TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY F OR THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT; 2(24)(IIIB) :- ANY ALLOWANCE GRANTED TO THE ASSESSEE EITHER TO MEET HIS PERSONAL EXPENSES AT THE PLACE WHERE THE DUTIES OF HIS OFFICE OR EMPLOYMENT OF PROFIT ARE ORDINARILY PERFORMED BY HI M OR AT A PLACE 27 WHERE HE ORDINARILY RESIDES OR TO COMPENSATE HIM FO R THE INCREASED COST OF LIVING. LD. COUNSEL FOR THE ASSESSEES FAIRLY SUBMITTED THAT THERE IS NO DISPUTE THAT THE LIVING ALLOWANCE GIVEN TO THE ASSESSEES COME WITHIN THE AMBIT OF SEC TION 2(24). HOWEVER, HIS CONTENTION IS THAT THE LIVING ALLOWANCE COMES WITHIN THE AMBIT OF SECT ION 2(24)(IIIA) AND NOT 2(24)(IIIB) AS HELD BY THE LD. CIT(APPEALS). SO, THE FIRST ISSUE WHICH ARI SES FOR OUR CONSIDERATION IN THE PRESENT APPEALS, IS WHETHER THE LIVING ALLOWANCE WAS COVERE D BY SECTION 2(24)(IIIA) OR 2(24)(IIIB). THE SECOND ASPECT WHICH HAS BEEN CONTENDED BY LD. SENIO R COUNSEL, SHRI BAJORIA IS THAT SINCE THE LIVING ALLOWANCE WAS COVERED UNDER THE PROVISIONS O F SECTION 2(24)(IIIA), THEREFORE, THE ASSESSEES HAD CLAIMED DEDUCTION UNDER SECTION 10(14 )(I) AND NOT UNDER SECTION 10(14)(II). SECTION 10(14)(I) AND 10(14)(II) READS AS UNDER :- 10(14)(I) : ANY SUCH SPECIAL ALLOWANCE OR BENEFIT, NOT BEING IN THE NATURE OF A PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SECT ION 17, SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY I NCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT, AS MAY BE PRESCRIBED, TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. 10(14)(II) : ANY SUCH ALLOWANCE GRANTED TO THE ASS ESSEE EITHER TO MEET HIS PERSONAL EXPENSES AT THE PLACE WHERE THE DUTIES OF HIS OFFICE OR EMPLOYMENT OF PROFIT ARE ORDINARILY PERFORMED BY HIM OR AT THE PL ACE WHERE HE ORDINARILY RESIDES, OR TO COMPENSATE HIM FOR THE INCREASED COS T OF LIVING, AS MAY BE PRESCRIBED AND TO THE EXTENT AS MAY BE PRESCRIBED. PROVIDED THAT NOTHING IN SUB-CLAUSE (II) SHALL APPL Y TO ANY ALLOWANCE IN THE NATURE OF PERSONAL ALLOWANCE GRANTED TO THE ASSESSE E TO REMUNERATE OR COMPENSATE HIM FOR PERFORMING DUTIES OF A SPECIAL N ATURE RELATING TO HIS OFFICE OR EMPLOYMENT UNLESS SUCH ALLOWANCE IS RELATED TO THE PLACE OF HIS POSTING OR RESIDENCE. WITH REFERENCE TO THE ABOVE MANDATE, LD. SENIOR COU NSEL SUBMITTED THAT THOUGH SPECIAL ALLOWANCE OR BENEFIT HAS BEEN TREATED AS INCOME UND ER SECTION 2(24)(IIIA) BUT SIMULTANEOUSLY EXEMPTION HAS BEEN ALLOWED UNDER SECTION 10(14)(I) IN RESPECT OF SUCH SPECIAL ALLOWANCE OR BENEFIT. SHRI BAJORIA FURTHER EXPLAINED THAT THE IN COME IS COVERED UNDER SECTION 2(24)(IIIB), THEN DEDUCTION IS ALLOWABLE UNDER SECTION 10(14)(II), WH ICH IS EVIDENT FROM THE PERUSAL OF THE MANDATE OF SECTION 10(14)(II) REPRODUCED ABOVE. HE FURTHER CLARIFIED THAT IN CASE THE PROVISIONS OF SECTION 10(14)(I) IS APPLICABLE TO THE ASSESSEES THEN RULE 2BB(1) WOULD BE APPLICABLE AND NOT SUB-RULE (2), WHICH IS APPLICABLE FOR CLAIMING EXEMPTION UNDER SECTION 10(14)(II). IN VIEW OF THE SUBMISSIONS, THE SECOND ISSUE WHICH ARISES F OR CONSIDERATION IS WHETHER THE ASSESSEES ARE 28 ENTITLED FOR EXEMPTION UNDER SECTION 10(14)(I) READ WITH RULE 2BB(1) OR 10(14)(II) READ WITH SECTION 2BB(2). ANSWER TO ISSUE NO. 2 DEPENDS ON THE OUTCOME TO ANS WER TO ISSUE NO. 1. 15. THE THIRD ISSUE WHICH ARISES FOR CONSIDERATION IN THE PRESENT APPEAL IS THAT IF ANSWER TO THE ISSUE NO. 1 IS IN FAVOUR OF ASSESSEES THEN WHET HER THE ASSESSEES FULFILL THE CONDITIONS LAID DOWN UNDER SECTION 10(14)(I) OR NOT. NOW, WE TAKE U P THE ISSUE NO. 1. CLAUSE 4(C) OF THE DEPUTATION TERMS AGREEMENT READS AS UNDER :- COMPENSATION IN THE UNITED STATES : IN ADDITION TO THE COMPENSATION AND BENEFITS YOU CURRENTLY RECEIVE AND WILL CONTINU E TO RECEIVE IN INDIA WHILE ON DEPUTATION, YOU SHALL RECEIVE ADDITIONAL C OMPENSATION IN THE UNITED STATES IN THE GROSS AMOUNT OF $ 50,000 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. 16. FROM THE ABOVE CLAUSE, IT IS EVIDENT THAT THE A DDITIONAL COMPENSATION IN THE UNITED STATES HAS BEEN PAID IN LUMPSUM WITHOUT ANY REFEREN CE TO MEET PERSONAL EXPENSES AT THE PLACE WHERE THE DUTIES OF OFFICE OR EMPLOYMENT WERE TO BE PERFORMED. THIS ADDITIONAL COMPENSATION WAS IN THE FORM OF A SPECIAL ALLOWANCE OR BENEFIT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEES HAD PLACED ON RECORD THE OBJECT AND PURPO SE OF PROVIDING THE ADDITIONAL COMPENSATION, WHICH HAS BEEN TAKEN NOTE BY ASSESSIN G OFFICER AND HAS ALREADY BEEN REPRODUCED EARLIER. IT WAS CLEARLY POINTED OUT THAT LIVING ALLOWANCE WAS GRANTED TO ASSESSEES SO AS TO ENABLE THEM TO MEET THE DAILY EXPENSES IN USA LIKE EXPENSES ON ACCOMMODATION, EXPENSES ON FOOD, EXPENSES ON WASHING OF CLOTHES, E XPENSES ON CONVEYANCE AND OTHER ROUTINE EXPENSES, WHICH WERE ORDINARILY INCURRED BY ANY IND IVIDUAL. THEREFORE, THE ADDITIONAL COMPENSATION REFERRED TO IN THE DEPUTATION AGREEMEN T IS TO BE READ ALONGWITH THESE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER, WHICH HAVE NOT A T ALL BEEN CONTROVERTED BY THE DEPARTMENT. CONSIDERING THESE ASPECTS, IT IS TO BE HELD THAT TH E LIVING ALLOWANCE WAS IN THE NATURE OF SPECIAL ALLOWANCE OR BENEFIT SPECIFICALLY GRANTED TO MEET E XPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY IN THE PERFORMANCE OF DUTIES OF AN OFFICE OR EMPLOY MENT OF PROFIT. THEREFORE, THE LIVING ALLOWANCE WAS COVERED UNDER THE PROVISIONS OF SECTI ON 2(24)(IIIA) AND NOT SECTION 2(24)(IIIB). IN THIS REGARD, WE MAY FURTHER OBSERVE THAT THE NAT URE OF PERSONAL EXPENSES CONTEMPLATED UNDER SECTION 2(24)(IIIB) ARE TO BE EXAMINED WITH REFEREN CE TO NATURE OF ALLOWANCES REFERRED TO IN RULE 29 2BB(2). WHERE AN EMPLOYEE IS POSTED AT SUCH A PLACE WHERE HE HAS TO INCUR CERTAIN ADDITIONAL EXPENSES ON ACCOUNT OF HAZARDS OF EMPLOYMENT, SUCH SPECIAL COMPENSATORY ALLOWANCE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(14)(II). ADMITTEDLY, THE COMPENSATION PAID IN THE PRESENT CA SE DOES NOT COME WITHIN THE AMBIT OF CLAUSE 2(24)(IIIB). 17. NOW COMING TO THE NEXT ISSUE REGARDING ASSESSEE S CLAIM FOR DEDUCTION UNDER SECTION 10(14). AS WE HAVE ALREADY HELD THAT LIVING ALLOWAN CE WAS COVERED UNDER SECTION 2(24)(IIIA), THEREFORE, ASSESSEES CLAIM FOR EXEMPTION UNDER SECT ION 10(14) IS TO BE CONSIDERED UNDER THE PROVISIONS OF SECTION 10(14)(I) AND NOT UNDER SECTI ON 10(14)(II). 18. THE INGREDIENTS OF SECTION 10(14)(I) ARE AS UND ER:- (I) THE AMOUNT SHOULD BE IN THE FORM OF SPECIAL AL LOWANCE OF BENEFIT; (II) IT SHOULD NOT BE IN THE NATURE OF PERQUISITE W ITHIN THE MEANING OF SECTION 17(2). (III) THE ALLOWANCE SHOULD HAVE BEEN SPECIFICALLY G RANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY INCURR ED FOR THE PERFORMANCE OF DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT. (IV) THE SPECIAL ALLOWANCE OR BENEFIT SHOULD HAVE B EEN SPECIFICALLY GRANTED IN THE PERFORMANCE OF DUTIES OF AN OFFICE A S ARE PRESCRIBED UNDER RULE 2BB(1). (V) THE SPECIAL ALLOWANCE OR BENEFIT IS EXEMPT TO T HE EXTENT TO WHICH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. 19. IF WE EXAMINE THE ABOVE AFOREMENTIONED INGREDIE NTS, WE FIND THAT THERE IS NO DISPUTE THAT LIVING ALLOWANCE WAS IN THE NATURE OF SPECIAL ALLOWANCE OR BENEFIT. FURTHER THIS SPECIAL ALLOWANCE OR BENEFIT WAS NOT COVERED BY SECTION 17( 2). IN THIS REGARD, WE MAY OBSERVE THAT ASSESSING OFFICER HAD TAXED IT UNDER SECTION 17(2) BUT LD. CIT(APPEALS) HAS HELD THAT IT SHOULD BE TREATED UNDER SECTION 2(24)(IIIB) AND NOT UNDER SECTION 17(2). THE DEPARTMENT HAS NOT PREFERRED ANY APPEAL ON THIS ASPECT, THEREFORE, IN ANY VIEW OF THE MATTER, THE SPECIAL ALLOWANCE OR BENEFIT DOES NOT COME WITHIN THE AMBIT OF SECTIO N 17(2) OF THE ACT. 30 20. THE THIRD ASPECT OF INGREDIENT IS ALSO NOT DISP UTED BECAUSE THE SUBMISSIONS OF ASSESSEES HAVE NOT BEEN CONTROVERTED IN THIS REGARD. 21. NOW COMING TO THE ISSUE REGARDING FULFILLING TH E CONDITIONS LAID DOWN IN INCOME TAX RULE 2BB(1)(B). THE SUBMISSION OF LD. SENIOR COUNSE L FOR THE ASSESSEES IS THAT THE ASSESSEES ARE TO BE TREATED ON TOUR TO UNITED STATES. HE SUBMITTE D THAT THE MAIN CONTROVERSY IN THE PRESENT APPEALS IS THIS ONLY. IN ORDER TO DECIDE WHETHER TH E ASSESSEES WERE ON TOUR OR NOT, WE HAVE TO EXAMINE FIRST THE REAL IMPORT OF THE TERM TOUR. T HIS TERM HAS NOT BEEN DEFINED IN THE RULES AND, THEREFORE, WE HAVE TO UNDERSTAND THE MEANING O F THIS TERM IN COMMON PARLANCE. WHEN A PERSON IS SENT ON TOUR FROM ONE PLACE OF HIS DUTY T O ANOTHER PLACE THEN HIS PLACE OF EMPLOYMENT IS NOT SHIFTED. WHILE ON TOUR, HE HAS TO DISCHARGE HIS FUNCTIONS AT A SPECIFIED PLACE AND THEN AGAIN HAS TO COME BACK TO HIS ORIGINAL PLACE OF POS TING. IN CASE, THE PLACE OF EMPLOYMENT IS SHIFTED, THEN IT COMES WITHIN THE AMBIT OF THE TERM TRANSFER AND NOT TOUR. THE BASIC CRITERIA FOR DECIDING, WHETHER A PERSON IS ON TOUR OR TRANSF ER IS TO EXAMINE HIS PLACE OF EMPLOYMENT IN CONSEQUENCE TO THE ORDER. IF PLACE OF EMPLOYMENT SH IFTS, IT IS TRANSFER ELSE TOUR ONLY. FURTHER, WHEN A PERSON IS ON TOUR, HE IS PROVIDED ALLOWANCE ONLY IN ORDER TO MEET HIS DAILY EXPENSES ON TOUR. BUT HIS SALARY STRUCTURE REMAINS THE SAME. TH E ALLOWANCE IS NOT AN ADDITION TO SALARY BUT ONLY FOR THE PURPOSES OF ADDITIONAL EXPENSES INVOLV ED IN THE PERFORMANCE OF DUTIES AT THE TOURING PLACE. ONE MORE ASPECT WHICH IS RELEVANT IN THIS REGARD IS DURATION FOR WHICH THE PERSON HAS BEEN SENT TO THE OTHER PLACE OF EMPLOYMENT. DUR ATION OF POSTING DEPENDS UPON THE SPECIFIED NATURE OF WORK TO BE PERFORMED AT THE PLA CE WHERE THE PERSON IS BEING SENT. THOUGH IT IS QUITE RELEVANT CONSIDERATION BUT CANNOT BE A CON CLUSIVE FACTOR IN DECIDING WHETHER PERSON HAS BEEN SENT ON TOUR OR TRANSFER. THE NEXT ASPECT IS R EGARDING THE CONSENT OF THE PARTY BEFORE SENDING HIM ON TOUR, WHETHER NECESSARY OR NOT? LD. CIT(APPEALS) WHILE CONSIDERING THIS ISSUE HAS, INTER ALIA, OBSERVED THAT THE CONSENT OF THE P ARTY IS OF NO RELEVANCE WHEN A PERSON IS SENT ON TOUR BECAUSE HE HAS TO OBEY THE DIRECTION OF HIS EM PLOYER WHEN HE IS BEING SENT ON TOUR. GENERALLY, THERE CANNOT BE ANY DISPUTE IN THIS REGA RD BUT IT ALL DEPENDS ON FACTS OF EACH CASE WHETHER EMPLOYEES CONSENT IS TO BE TAKEN BEFORE SE NDING HIM ON TOUR OR NOT. SUPPOSING A PERSON IS TO BE SENT ON TOUR TO A PLACE WHERE THE C LIMATIC CONDITIONS ARE SUCH THAT A PERSON CANNOT WITHSTAND THE SAME. IN SUCH CIRCUMSTANCES, C ONSENT OF EMPLOYEE BECOMES NECESSARY. THEREFORE, NOTHING TURNS ON THIS ASPECT. 31 22. NOW, WE PROCEED TO EXAMINE THE FACTS OF THE PRE SENT 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 BEI NG 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 T HERE ARE ANY SUCH CHANGES WITH RESPECT TO YOUR DEPUTATION, WE WILL GIVE YOU AS MUC H ADVANCE NOTICE AS IS PRACTICABLE UNDER THE CIRCUMSTANCES. 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 A S OTHER INFORMATION THAT WILL BE HELPFUL TO YOU ON YOUR DEPUTATION. YOU SHOULD RE VIEW THE MANUAL CAREFULLY. REMEMBER, WHILE YOU ARE IN THE USA, YOU WILL BE A R EPRESENTATIVE OF TCS, AND ARE EXPECTED TO MAINTAIN A PROFESSIONAL IMAGE AT AL L TIMES. AFTER YOU HAVE REVIEWED THE ENCLOSED MATERIALS, OR IF YOU HAVE ANY QUESTIONS WHILE YOU ARE REVIEWING THEM, YOU SHOULD CONTACT TH E PERSONNEL DEPARTMENT. IT IS ESSENTIAL THAT YOU FULLY UNDERSTAND ALL ASPECTS AND CONDITIONS OF YOUR DEPUTATION BEFORE CHOOSING TO PROCEED ON THIS ASSIG NMENT AND SINGING YOUR DEPUTATION AGREEMENT AND SERVICE AGREEMENT ADDENDUM . YOUR SIGNATURE BELOW ON THE ADDITIONAL COPY OF THIS LETTER WILL CONFIRM YOUR UNDERSTANDING OF THIS OBLIGATION AND YOUR AGREEMENT TO FULFILL IT. 23. DEPUTATION AGREEMENT- UNITED STATES (AGREEMENT ) DATED 17.10.2004 BETWEEN ASSESSEES AND TATA CONSULTANCY LIMITED IS AS UNDER :- A. IN ORDER TO QUALIFY THE EMPLOYEE FOR OVERSEAS A SSIGNMENT, OR DEPUTATION (DEPUTATION), THE EMPLOYER HAS PROVIDED THE EMPLO YEE WITH EXTENSIVE SPECIALIZED TRAINING AND EXPERIENCE IN INFORMATION TECHNOLOGY AND ITS APPLICATION, INCLUDING TRADE SECRETS AND THE EMPLOYERS PROPRIET ARY INFORMATION, FOR WHICH THE EMPLOYER INCURS CONSIDERABLE COSTS AND EXPENSES. B. THE EMPLOYER HAS SELECTED THE EMPLOYEE FOR DEPU TATION TO THE UNITED STATES AND, BY READING AND SIGNING THIS DEPUTATION AGREEMENT, AND THE ANNEXED DEPUTATION TERMS AGREEMENT THE EMPLOYEE AGREES TO G O ON DEPUTATION WHERE THE EMPLOYEE WILL BE ASSIGNED TO USE HIS/HER TRAINING A ND EXPERIENCE ON ONE OR MORE PROJECTS OF THE EMPLOYER FOR ITS CLIENTS IN THE UNI TED STATES. C. THE EMPLOYEE SHALL ACQUIRE COMMERCIALLY USEFUL EXPERIENCE, KNOWLEDGE AND SKILLS WHITE ON DEPUTATION IN THE UNITED STATES, AN D SUCH EXPERIENCE, 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 R ETURN TO INDIA 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 COMMIT, TO COMPLETE HIS/HER DEPUTATION IN THE UNITED STATES, A ND TO RETURN TO INDIA AT THE CONCLUSION OF A DEPUTATION IN ORDER TO IMPART THE E XPERIENCE, KNOWLEDGE AND SKILLS ACQUIRED ON THE DEPUTATION TO EMPLOYEES OF THE EMPL OYER IN INDIA. THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS SET FORTH BELOW AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY 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 COMMEN CEMENT OF THE EMPLOYEES EMPLOYMENT THE SERVICE AGREEMENT, AND ALL OTHER CUR RENT AGREEMENTS BETWEEN THE EMPLOYEE AND THE EMPLOYER REGARDING THE EMPLOYMENT RELATIONSHIP IN INDIA, REMAIN IN FULL FORCE AND EFFECT THIS AGREEMENT GOVERNS THE TE RMS OF THE EMPLOYEES DEPUTATION TO THE UNITED STATES. A DEPUTATION IS DEFINED AS AN OVERSEAS ASSIGNMENT TO THE UNITED SLATES WHEN, FOR THIS DEPUTATION AGREEMENT, UNLESS OTHERWISE TERMINA TED OR AMENDED ACCORDING TO ITS TERMS, SHALL GOVERN AND APPLY TO EACH AND EVERY DEP UTATION OF THE EMPLOYEE TO THE UNITED STATES, AND IT SHALL REMAIN IN EFFECT DURING THE EMPLOYEES EMPLOYMENT 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 DEPUTATION AND SHALL BE IN EFFECT ONLY DURING THE DEPUTATION TO WHICH IT APPLIES. 1.2. PERIOD OF DEPUTATION. THE DEPUTATION WILL BEG IN ON THE DATE THE EMPLOYEE LEAVES INDIA FOR THE UNITED STATES FOLLOWING EXECUT ION OF A DTA, AND SHALL CONTINUE UNTIL THE STATED TERM OF THE DEPUTATION, OR EXTENSI ON THEREOF, HAS EXPIRED,. THE INITIAL TERM OF THE DEPUTATION IS SET FORTH IN THE APPLICAB LE 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 E XTENDED 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 T HE RIGHT TO CHANGE THE LOCATION OF THE DEPUTATION ASSIGNMENT IN THE UNITED STATES, AND TO TRANSFER THE EMPLOYEE TO AN EMPLOYER PROJECT FOR A DIFFERENT EMPLOYER CLILENT IN THE UNITED STATES. UPON ANY SUCH CHANGE LOCATION OR ASSIGNMENT, THE PROVISIONS OF TH IS AGREEMENT WILL CONTINUE TO APPLY AND REMAIN IN FULL FORCE AND EFFECT, AND EMPLOYER S HALL CONFIRM TO EMPLOYEE IN WRITING THE DETAILS CONCERNING THE NEW LOCATION OR ASSIGNME NT. COMPENSATION AND BENEFITS IN CONNECTION WITH THE DEPUTATION, THE EMPLOYEE WIL L RECEIVE COMPENSATION AND BENEFITS IN INDIA AND IN THE UNITED STATES, FOR SER VICES RENDERED BY THE EMPLOYEE DURING THE DEPUTATION IN THE UNITED STATES. THE GROSS AMOU NT OF THE TOTAL COMPENSATION IN INDIA AND THE UNITED STATES IS SET FORTH IN THE APP LICABLE DTA, AND THIS TOTAL GROSS 33 AMOUNT OF COMPENSATION SHALL BE INCLUDABLE AS EARNI NGS IN THE UNITED STATES AND REPORTED ON U.S. INTERNAL REVENUE SERVICE FORM W-2. MORE SPECIFICALLY, THE COMPENSATION AND BENEFITS ON THE DEPUTATION WILL BE AS FOLLOWS: INITIAL PAYMENTS- BEFORE THE EMPLOYEE EMBARKS ON H IS/HER DEPUTATION, THE EMPLOYER WILL MAKE THE FOLLOWING PAYMENTS TO THE EMPLOYEE: (A) THE EMPLOYER WILL COMPENSATE TO THE EMPLOYEE AN AMOUNT IN RUPEES THAT IS DESIGNED TO ENABLE THE EMPLOYEE TO PURCHASE ANY USU AL AND NECESSARY 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 COMMENCEMENT OF A DEPUTATION. 2.2. AIRFARE- BEFORE THE EMPLOYEE EMBARKS ON HIS/ HER DEPUTATION, THE EMPLOYER WILL OBTAIN A ROUND TRIP AIRLINE TICKET FOR THE EMPLOYEE S TRAVEL BETWEEN INDIA AND THE UNITED STATES. THE EMPLOYER WILL BEAR THE COST OF T HIS AIRFARE, AND THIS AMOUNT WILL NOT BE INCLUDED IN GROSS COMPENSATION. THE EMPLOYER SHA LL ALSO BEAR THE COST OF TRANSPORTATION WITHIN THE UNITED STATES BETWEEN THE PLACE OF ARRIVAL AND THE SITE WHERE EMPLOYEE SHALL REPORT TO WORK. COMPENSATION AND BENEFITS IN INDIA - DURING THE PE RIOD OF THE DEPUTATION, THE EMPLOYEE WILL CONTINUE TO RECEIVE HIS/HER SALARY AN D 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 AN D ITS STATES. MOREOVER, THE PERIOD OF THE DEPUTATION WILL BE TREATED AS APPROVED SERVICE WITH THE EMPLOYER AND COUNTED FOR ALL OF THE FOLLOWING PURPOSES IN INDIA, BASED ON TH E SALARY THE EMPLOYEE CONTINUES TO RECEIVE IN INDIA WHILE ON DEPUTATION, PRIVILEGE LEA VE, PROMOTION, ANNUAL INCREMENT AND PAYMENT OF HOUSING SUBSIDY, PERFORMANCE REWARD, PROVIDENT FUND CONTRIBUTIONS AND SUPERANNUATION FUND CONTRIBUTIONS. COMPENSATION IN THE UNITED STATES- DURING THE PERIO D OF THE DEPUTATION THE EMPLOYEE WILL RECEIVE ADDITIONAL COMPENSATION IN U.S. DOLLAR S, IN THE AMOUNT STATED IN THE DTA. THIS COMPENSATION SHALL BE FOR LIVING AND OTHER EXP ENSES IN THE UNITED STATES. IT SHALL BE PART OF EMPLOYEES TOTAL COMPENSATION FOR PURPOS ES OF U.S. DEPARTMENT OF LABOR PREVAILING WAGE DETERMINATIONS. TOTAL GROSS COMPENSATION- AMOUNTS OF SALARY PAID B Y 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 T HE EMPLOYEES EMPLOYMENT IN THE UNITED STATES. 34 YOUR DEPUTATION SHALL BEGIN ON OR ABOUT 17 TH OCTOBER, 2004, YOU SHALL INITIALLY BE ASSIGNED TO PERFORM IT CONSULTING SERVICES ON BE HALF 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 RENDE R SERVICES TO TCS FOR ITS CLIENTS IN THE UNITED STATES FOR A SHORTER OR LONGE R DURATION, AND COULD RESULT IN A CHANGE OF LOCATION OR TRANSFER TO A TCS PROJECT F OR A DIFFERENT CLIENT IN THE UNITED STATES. IF THERE ARE ANY CHANGES WITH RESPE CT TO THE PERIOD OF YOUR DEPUTATION OR THE LOCATION OF YOUR ASSIGNMENT, WE W ILL 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 PER IOD OF DEPUTATION OR TO SERVE AT ANY PARTICULAR LOCATION OR CLILENT PROJECT. HOWE VER, IF THE PERIOD OF YOUR DEPUTATION IS EXTENDED BEYOND THE SCHEDULED 12 MONT H PERIOD, THE EXTENSION SHALL BE REFLECTED IN A MUTUAL WRITTEN AGREEMENT. 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 I NITIAL EXPENSES FOR TRANSPORTATION AND HOUSING WHEN YOU ARRIVE IN THE U NITED STATES. (B) SALARY AND BENEFITS IN INDIA :- AS STATED IN T HE DEPUTATION AGREEMENT, YOU WILL CONTINUE TO RECEIVE YOUR SALARY AND BENEFITS I N INDIA DURING THE PERIOD OF THE DEPUTATION, SUBJECT TO ANY TAX REQUIREMENTS OF THE UNITED STATES AND ITS STATES. (C) COMPENSATION IN THE UNITED STATES.. IN ADDITION TO THE COMPENSATION AND BENEFITS YOU CURRENTLY RECEIVE AND WILL CONTINUE TO RECEIVE IN INDIA WHO ON DEPUTATION, YOU SHALL RECEIVE ADDITIONAL COMPENSATI ON IN THE UNITED STATES IN THE GROSS AMOUNT OF US$50000 LESS DEDUCTIONS REQUIR ED BY LAW OR OTHERWISE VOLUNTARILY AUTHORIZED BY YOU. THIS COMPENSATION SH ALL BE FOR LIVING AND OTHER EXPENSES IN THE UNITED STATES. (D) TOTAL GROSS COMPENSATION AMOUNTS OF SALARY PAID BY TCS IN INDIA (UNDER PARAGRAPH 4 (B) ABOVE) AND THE ADDITIONAL COMPENSAT ION IN THE UNITED STATES (UNDER PARAGRAPH 4(C) ABOVE) SHALL BE AGGREGATED AN D THUS SHALL BE TREATED AS YOUR TOTAL GROSS COMPENSATION FOR PURPOSES OF U.S. LAW WITH RESPECT TO YOUR EMPLOYMENT IN THE UNITED STATES. 24. FROM THE ABOVE NOTED CONTENTS OF DEPUTATION LET TER 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 PROJECTS COULD CHANGE AT THE INSTANCE OF EMPLOYER. THE EMPLOYEES WERE TO REPORT BACK TO THE EMPLOYER AND S ERVE THE EMPLOYER AFTER ACQUIRING SKILL 35 FROM USA PROJECTS. THE SALARY STRUCTURE OF EMPLOYEE S REMAINED SAME AND THE ADDITIONAL AMOUNTS WERE PAID ONLY FOR THE PURPOSES OF ADDITION AL ROUTINE EXPENSES IN USA. THIS IS EVIDENT FROM DEPUTATION AGREEMENT, WHICH DEALS WITH COMPENS ATION AND BENEFITS NOTED ABOVE. IT IS SPECIFICALLY MENTIONED IN PARA 2.3 THAT DURING THE PERIOD OF DEPUTATION, THE EMPLOYEE WILL CONTINUE TO RECEIVE HIS SALARY AND BENEFITS IN INDI A. THIS CLEARLY SHOWS THAT PLACE OF POSTING HAD NOT CHANGED, WHICH IS BASIC INGREDIENT FOR DECIDING WHETHER A PERSON HAD BEEN TRANSFERRED OR WAS ON TOUR. LD. CIT(APPEALS) HAS WRONGLY CONCLUDED THAT HEADQUARTERS HAD BEEN SHIFTED FROM KOLKATA TO USA. LD. CIT(APPEALS) HAS ALSO POINTED O UT 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 A SSESSEES WERE TO BE SENT ABROAD, THEY HAD TO OBTAIN VISA ALSO FOR THAT PURPOSE. IN THAT REGARD, ALL THE SPECIFIC REQUIREMENTS HAD TO BE FULFILLED BY THE EMPLOYER. BUT THAT SHOULD NOT DETRACT US FRO M EXAMINING THE TRUE IMPORT OF THE TERM TOUR. LD. CIT(APPEALS) HAS ALSO POINTED OUT THAT AS PER THE DEPUTATION AGREEMENT, THE ASSESSEES WERE ENTITLED TO TAKE THEIR FAMILIES BUT THAT ALSO CANNOT BE A BASIS FOR DECIDING WHETHER THE ASSESSEES WERE TO BE TREATED ON TOUR IN TERMS OF RULE 2BB(1)(B) OR NOT BECAUSE THAT RULE DOES NOT PROHIBIT TAKING THE FAMILY ON TOUR. W E ARE, THEREFORE, OF THE CONSIDERED OPINION THAT KEEPING IN VIEW THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ASSESSEES WERE TO BE TREATED ON TOUR AND, THEREFORE, ELIGIBLE FOR CLA IMING DEDUCTION UNDER SECTION 10(14)(I) READ WITH RULE 2BB(1)B). FURTHER, WE FIND THAT THE ISSUE RELATING TO LIVING ALLOWANCE HAS BEEN CONSIDERED BY VARIOUS DECISIONS RELIED UPON BY THE LD SENIOR COUNSEL FOR THE ASSESSEES WITH REFERENCE TO NON-RESIDENTS. LD. CIT(APPEALS) HAS DI STINGUISHED ALL SUCH CASE LAWS ON THE GROUND THAT THEY RELATE TO NON-RESIDENTS AND NOT WI TH REFERENCE TO THE EMPLOYEES BEING SENT ABROAD. WE DO NOT FIND ANY RATIONALE IN DISTINGUISH ING THE CASE LAWS NOTED IN LD. SENIOR COUNSELS SUBMISSIONS MERELY ON THE GROUND THAT THE Y 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 UNDER SECTION 10(1 4)(I) READ WITH RULE 2BB(1). IT DOES 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 THE 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 36 HAS BEEN HELD THAT IT IS NOT OPEN TO THE REVENUE T O 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 PR OVISIONS OF FBT. IN VIEW OF ABOVE DISCUSSIONS, THE APPEALS OF THE A SSESSEES AS WELL AS THE CROSS OBJECTIONS ARE ALLOWED. 26. WITH REGARD TO THE DEPARTMENTAL APPEALS, WE HAV E ALREADY HELD THAT LIVING ALLOWANCE IS NOT TAXABLE. THEREFORE, INTEREST LEVIED UNDER SECTI ON 234B CANNOT BE SUSTAINED. EVEN OTHERWISE, WE FIND THAT THE ISSUE IS COVERED BY THE DECISION O F 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, IN 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 RESPECT OF LIVING ALLOWANCE, THEN IN VIEW OF DTAA WITH USA, THE ASSESSEES WOULD BECOME ENTITLED TO GE T TAX CREDIT IN RESPECT TAX PAID ON LIVING ALLOWANCE IN USA. HOWEVER, AS WE HAVE ALREADY HELD THAT LIVING ALLOWANCE IS NOT TAXABLE IN INDIA, THEREFORE, ASSESSEES ARE ENTITLED FOR EXEMPT ION UNDER SECTION 10(14(I). THEREFORE, THEY CANNOT CLAIM TAX CREDIT IN RESPECT OF TAX PAID IN U SA ON LIVING ALLOWANCE BECAUSE AS VERY FAIRLY POINTED OUT BY THE LD. SENIOR COUNSEL FOR THE ASSES SEES, DTAA WOULD COME INTO PLAY ONLY WHEN A PARTICULAR RECEIPT IS TAXABLE IN BOTH THE COUNTRI ES. 37 28. IN THE RESULT, THE APPEALS AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEES ARE ALLOWED AND THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/ 09/2011. SD/- SD/- [ MAHAVIR SINGH / '! '! '! '! ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 30/ 09/ 2011 COPY OF THE ORDER FORWARDED TO: 1. ALL THE ASSESSEES. 2 ITO, WARD-27(4), KOLKATA. 3. CIT(APPEALS)- ,KOLKATA 4. CIT- , KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.

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