TMI Blog2000 (11) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... r relatively short periods of time. The Tribunal having held in the appeal preferred by the assessee that the disallowance under rule 6D of the Income-tax Rules would take into account all the expenses incurred by the assessee during the entire period of absence of its employees from headquarters, the correctness of that decision has been called into question in the reference made at the instance of the assessee. That question can be immediately disposed of, as another Bench of this court in the case of R.K. Swamy Advertising Associates Pvt. Ltd. v. CIT [1996] 220 ITR 507 has already held that the expenditure incurred in connection with the travelling by an employee including hotel expenses or allowances paid in connection with such trave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Continental Construction Ltd. [1998] 230 ITR 485 has held that section 40(c) and 40A(5) are to be read together both for the purpose of ceiling on expenditure, as also for the purpose of deciding what is to be excluded from the expenditure subject to the ceiling, and that the two provisions are to be read as constituting a composite scheme. The purpose of prescribing ceiling on expenditure in connection with directors and employees under sections 40(c) and 40A(5) of the Act, viz. "... to discourage a company or an organisation from paying excessive salaries, remuneration, perquisites, etc., to its employees and/or directors. If it does so, the organisation will not be able to claim the entire expenditure as deduction, but only expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oad for short periods to attend to the employer's work abroad is not a person who can be regarded as being employed outside India. He continues to be employed in India and his place of employment does not change to a place outside India only on account of his having made short visits to places outside India in the course of, the performance of his work for his employer in India. In the case of the crew employed on a ship, the place of work is the ship itself. When the ship moves out of the territorial waters of India, the place of employment is a place outside India, and the person employed on the ship is employed outside India, though the employer is placed in India. Therefore, in the case of the crew employed on the ship for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays for which he had remained abroad in connection with the employer's work was not to be excluded from the purview of section 40A(5)(a) of the Act. Learned counsel for the, assessee invited our attention to section 6(1)(b) of the Act and the Explanation (a) thereunder, as amended from April 1, 1990, by which a member of the crew of an Indian ship as defined in section 3(18) of the Merchant Shipping Act would be treated as non-resident, if he remains outside India for 182 days. This only indicates recognition by the Legislature that a person employed as a member of the crew on an Indian ship when the ship leaves India, is to be regarded as a person not resident in India by reason of his employment on the ship. Employment on ship which is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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