TMI Blog2009 (2) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in allowing deduction on account of hypothetical-tax from salary income of the assessee chargeable to tax in India. What are termed as grounds of appeal are in fact arguments in support of these grievances of the AO. The two issues identified above, in our opinion, are the issues which require our adjudication in these appeals, and, with the consent of the parties, we will address ourselves to these two cores issues. 3. The issues requiring our adjudication lie in a narrow compass of undisputed facts. The assessee before us is a Czech national employed with Skoda Auto AS, a company incorporated in Czechoslovakia, and is currently under deputation to Skoda Auto India (P) Ltd. On 31st July, 2006, the assessee filed an IT return disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntribution. Reliance was also placed on Tribunal's decision in the case of Gallotti Raoul vs. Asstt. CIT (1997) 61 ITD 453 (Bom) and it was highlighted that in the said case also only net income was chargeable to tax after adjustment of the French social security charges as was the assessee's case. On the basis of these submissions, the assessee contended that the deductions on account of hypothetical-tax and social security contribution were rightly claimed by the assessee. None of these submissions, however, impressed the AO. He noticed that in Jaydev Raja's case, the assessee had shown gross income and tax liability on that income had been paid whereas in the present case, the assessee had reduced hypothetical-tax from the base salary it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant's case are identical. The same policy was followed by Skoda Auto AS. In view of this, the decision of Tribunal Mumbai in the case of Jaydev Raja is squarely applicable on the facts of this case. In the case of Jayadev H. Raja, Hon'ble Tribunal has held that hypothetical-tax reduced by the employer in the case of the appellant has been rightly claimed as deduction......... In view of the aforesaid legal position, in my opinion, the appellant was fully justified in claiming deduction on account of hypothetical-tax because liability of employer will be restricted only to the extent of additional liability over and above what would have arisen had the appellant been in Czech Republic. Therefore, the amount of Rs. 20,21,281, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o given by the CIT(A), the AO is in appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 7. As far as the deduction on account of social security contribution concerned, and bearing in mind undisputed facts of this case, we agree with the learned CIT(A) that this issue is covered in favour of the assessee by Tribunal's decision in the case of Gallotti Raoul. We see no reasons to take any other view of the matter than the view so taken by the co-ordinate Bench. Respectfully following the same, we confirm the conclusion arrived at by the CIT(A) and decline to interfere in the matter. 8. On the issue of deductibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes when the same are to be computed with reference to the salary of the employee. The deduction, therefore, should be made at the stage of computing the tax perquisite and not the basic salary. Learned counsel does not dispute this but submits that so far as this year is concerned, this aspect of the matter will have no impact on the tax liability on account of s. 10(10CC) being on the statute book. He has also filed his computation of the salary income on the basis of the deducting hypothetical-tax, under tax equalization policy, from tax perquisite, with a view to demonstrate correctness of factual element embedded in his contentions. 10. In view of the above discussions, and bearing in mind the fact that there will be no tax impact in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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