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2012 (11) TMI 904 - AT - Income TaxDeduction u/s 80-O - held that:- Supply of man power is one of the services rendered by the assessee and otherwise, mainly the assessee does the supply of comprehensive technical services for designing and development - assessee is entitled to relief as given by CIT (A) and is eligible for claiming deduction u/s. 80-O - ground raised by Revenue is dismissed. Deduction u/s 40(a)(iii)- Employer-Employee relationship - salary payble outside India - held that:- Seconded personnel who is deputed by a foreign company to an Indian Companywere not employees of the assessee company foreign allowance paid to them by the assessee company cannot be considered as part of salary and so provisions of section 40(a)(iii) are not applicable as there is no Employer-Employee relation. overseas allowances is not chargeable under the head “Salary”. Therefore, section 40(a)(iii) does not apply. Similar view is also endorsed by the Hon’ble Kerala High Court in the case of [CIT vs. G. Eroppino Giovanni 1991 (7) TMI 36 - KERALA HIGH COURT] - CIT (A) is correct in holding that there is no employee-employer relationship so as to consider the disallowance under section 40(a)(iii) of the Act - impugned payments made cannot be taxed under the head “Salaries” - in favour of assessee and ground raised by Revenue is dismissed. Relief u/s 91(1)- held that:- Word “paid” in Sec.91(1) of the Act means constructive payment of tax and the onus is on the assessee to lead evidence that the taxes had in fact being paid in any country with which there is no agreement u/s 90 for avoidance of double taxation. Assessee made the payment of taxes in Kuwait and the dates and amounts of the said payments of taxes were made available before the CIT (A) - Original documents were also filed evidencing the same for relief in respect of the said taxes paid in Kuwait u/s 91(1) of the Act - assessee is entitled to said relief - ground raised by Revenue is dismissed. Taxability of Income ie gain in foreign exchange fluctuation - “Business Income”vs “Income from Other Sources” - held that:- If Exchange fluctuation is on the export proceeds itself, then it has to be treated as gain in business and if the gains on exchange fluctuation occurs on the funds lying parked in EEFC account, then in that case, the case of [CIT vs Shah Originals 2010 (4) TMI 216 - BOMBAY HIGH COURT] is to be applied and treat that gain as income from other sources - ground raised stands covered by the said decision of the Tribunal in the assessee’s own case - In the result, appeal of the Revenue is allowed in part. Condonation of delay of 1529 days in filing C.O. - held that:- Expalnation of assessee which revolves around the ‘oversight’ and assessee’s conference with his counsel after expiry of four years, in our opinion does not constitute ‘sufficient cause’ within the meaning of section 253(5) of the Act. It is not in the normal course that the assessee has not met his counsel for all these four years. As such there is no confirmation from the said Counsel by way of any affidavit that the assessee had impugned conference to advise for filing the impugned CO. In the present case, there is a negligence on part of the appellant and it is a case of absence of due diligence. Further also, the assessee has not demonstrated that it was beyond his control that the Cross Objection could not be filed before the expiry of the limitation period of 30 days specified in section 253(4) of the Act. Therefore, delay in filing the Cross Objection remains unexplained - no sufficient cause for condonation of delay of 1529 days - impugned application for condonation of delay by the Cross Objector, Respondent is dismissed - In the result, Revenue appeal is allowed in part and the Cross Objection is dismissed.
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