TMI Blog2015 (9) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... ue against the order of ld. Commissioner of Income Tax (Appeals)-XIV, Kolkata in Appeal No. 556/CIT(A)-XIV/08-09 dated 18.03.2010 for the assessment year 2006- 07. 2. The assessee is an employee of M/s. TCS Limited. During the previous year under consideration, the assessee has rendered his services in U.S.A. for a certain period of time. During his period of stay in U.S.A., he was paid living allowance. The assessee had claimed the sum as exempt under section 10(14) of the Act. 4. Shri A.P. Roy, JCIT, Sr. D.R. represented on behalf of the Revenue and none represented on behalf of the assessee. Therefore, we have decided to dispose of the appeal after hearing the ld. D.R. and the material available on record. 5. In the appeal, Revenue has challenged the action of the ld. CIT(Appeals) in deleting the interest levied under section 234B in respect of the disallowance of the living allowance under section 10(14) of the Act. 6. At the time of hearing, ld. D.R. vehemently supported the order of Assessing Officer and pleaded that the order of ld. CIT(Appeals) was liable to be reversed. 7. We have heard the ld. D.R. and perused the material available on record. From the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ), the Employer has provided the Employee with extensive specialized training and experience in Information Technology and its application, including trade secrets and the Employer s proprietary information, for which the Employer incurs considerable costs and expenses. B. The Employer has selected the Employee for Deputation 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 where 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 experience, knowledge and skills white on Deputation in the United States, and such experience, knowledge and skills are of substantial value to the Employer for dissemination by the Employee to the 32 Employer s employees in India upon the Employee s return 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 Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... location or assignment, the provisions of this Agreement will continue to apply and remain in full force and effect, and Employer shall confirm to Employee in writing the details concerning the new location or assignment. COMPENSATION AND BENEFITS In connection with the Deputation, the Employee will receive compensation and benefits in India and in the United States, for services rendered 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 benefits on the Deputation will be as follows: Initial Payments- Before the Employee embarks on his/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 usual and necessary outfits for the Deputation, and to cover initial incidental travel-related expenses in embarking on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h October, 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 scheduled for a period of 12 months. However, various factors could require you to render services 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 assignment, we will give you as much advance notice as is practicable under the circumstances. It is understood that you have no right to serve any particular fixed period of deputation 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 in a mutual written agreement. 4. The following specific provisions shall govern your deputation :- (A) OverseasTravel and Reimbursement TCS shall be used travelers cheques, which is designed for your use in meting initial expenses for transportation and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the specific requirements had to be fulfilled by the employer. But that should not detract us from 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. We 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 claiming 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 distinguished all such case laws on the ground that they relate to non- residents and not with reference to the employees being sent abroad. We do not find any rationale in distinguishing the case laws noted in ld. Senior counsel s submissions merely on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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