TMI Blog2004 (5) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... oss remuneration received from M/s. Citizen Watch Co. Ltd., Hongkong. The assessee having received remuneration for services rendered outside India had claimed the deduction available under section 80RRA. The Assessing Officer while computing the deduction adjusted the expenditure incurred by the assessee against the receipt of remuneration and only the net of the remuneration was considered. This was confirmed by the Commissioner of Income-tax (Appeals), against which the present appeal is before us. Learned counsel appearing for the assessee contended that the concept of net amount is not applicable to the deduction envisaged under section 80RRA. Learned counsel stated that this is because of the fundamental distinction between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant expenditure against relevant receipts. Remuneration is the compensation paid for services rendered for which there is no need of setting off of accounts inter se. Learned counsel in this context placed reliance on the Circular issued by the Central Board of Direct Taxes wherein the intended purposes of section 80RRA as introduced by the Finance Act, 1975, are explained (Circular No. 169, dated June 23, 1975 Taxman s Direct Tax Circular with Judicial Analysis, Volume 4, Edition 1999 page 2.646). The learned Departmental representative on the other hand submitted that the Commissioner of Income-tax (Appeals) has discussed the matter in a very detailed manner on the basis of relevant case law and has come to a judicious finding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for any such computation. This is because the remuneration is always predetermined on the basis of the terms of the service contract. The computation of remuneration is not dependent on the turnover or price level, etc. as in the case of business profit. The remuneration is fixed either on time basis or on piece basis. It is to be seen that remuneration is always predetermined. Therefore, the concept of netting cannot be deployed while working out the deduction in the context of remuneration. We therefore accept the contention of the assessee and allow the ground raised by the assessee. We direct the Assessing Officer not to deduct any expenditure from the remuneration included in the course of total income of the assessee and give the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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