9911796707
TMI Blog1996 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... er the terms of the agreement, Dr. Verman was required to perform his services at the rate of 138 dollars plus 17 per cent. per day for each day's work during the term of the agreement payable at the end of each month. He was to advise and act as a consultant to the company on problems relating to formulation of detailed plans and programmes for the development, staffing and equipment of the Korean Standard System. The petitioner's husband made an application to the Government of India for approval of the agreement under section 80RRA of the Income-tax Act, 1961 (for short, " the Act "). This application was rejected by the Government of India by its letter dated February 28, 1976, for twin reasons, namely, (a) the relationship between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since section 80RRA came into force from April 1, 1975, it was effective for the assessment year 1975-76, i.e., for the previous year ending on March 31, 1975, and was, therefore, applicable. Learned counsel for the respondents, however, contends otherwise and has argued that the reasons advanced by the Government of India for rejecting the application of the petitioner's husband are correct in law. I have considered the submissions of learned counsel for the parties. I am of the opinion that the order passed by the Government of India dated February 28, 1976, cannot be allowed to stand. At this stage, it will be convenient to extract section 80RRA of the Act which is as follows : " 80RRA. (1) Where the gross total income of an indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) a foreign enterprise ; or (iii) any association or body established outside India (c) " technician " means a person having specialised knowledge and experience in-- (i) constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power ; or (ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building ; or (iii) public administration or industrial or business management ; or (iv) accountancy ; or (v) any field of natural or applied science (including medical science) or social, science ; or (vi) any other field which the Board may prescribe in this behalf, who is employed in a capacity in which such specialised knowledge and experience are actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her similar cases, the requirement of actual service is distinct from the employment by the party employing.' In an agreement to ' retain and employ ', ' employ ' means only to ' retain ' in the service ' and is mere tautology '. See in this connection, Stroud's Judicial Dictionary, 4th edition, Vol. 2, at page 893. The expression, however, must depend upon the context of the particular provision in which the expression appears. It was held in England that an engineer appointed by a local authority to supervise the execution of works, but not subject to the local authority's supervision, is nevertheless an 'employee' within the meaning of section 40(1) of the Local Government Superannuation Act, 1937, in Morren v. Swinton and Pendlebury Bor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign currency, the payment of the fee will be covered under the term "remuneration" which is of a wide amplitude. Similarly, when a foreign employer agrees to pay to a consultant whose services are being utilised on retainership basis the payment would still be covered under the term "remuneration". Again, section 80RRA applies where an individual receives payment from a foreign employer for any, service rendered by him outside India. The reasoning of the Government of India that the contract between parties does not establish the relationship of an employer and an employee and therefore section 80RRA of the Act is not attracted, is not sound in view of the law laid down by the Supreme Court in CBDT v. Aditya V. Birla [1988] 170 ITR 137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force : "(2) Save as otherwise provided in this Act, sections 2 to 30 shall be deemed to have come into force from the 1st day of April, 1975." Thus, section 80RRA which was inserted by section 17 of the Finance Act, 1975, came into force from the lst day of April, 1975, and was introduced from the assessment year 1975-76. This being so the benefit of the provision would be available in respect to the period relevant to the assessment year 1975-76. In other words, it means that the benefit would be available for accounting year ending on March 31, 1975. The petitioner's husband was claiming the benefit for the accounting period ending on March 31, 1975. Besides, section 80RRA does not provide that the agreement for which approval is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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