TMI Blog1993 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... , with Yuka Investments Ltd., Hongkong, by the assessee, the Tribunal was correct in law in holding that the assessee was entitled to deduction under section 80-O of the Act on the basis of the approval of the Government of India dated November 3, 1978, as per their application dated May 1, 1978, in respect of the assessment year 1979-80 for which the assessee claimed the accounting year as ending June 30, 1978 ?" The assessee-company was incorporated on October 15, 1977, to carry on the business of providing consultancy services in connection with insurance business. The assessee's accounts for the first year were closed on June 30, 1978, the relevant assessment year for the same being assessment year 1979-80. The assessee submitted its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific statement that the date of commencement of the agreement was from November 1, 1977, and the services rendered before the execution of the written agreement were also covered by the said agreement. The above order of the Income-tax Officer, on being affirmed by the Commissioner of Income-tax (Appeals), the assessee appealed to the Income-tax Appellate Tribunal. The Tribunal accepted the claim of the assessee for relief under section 80-O of the Act on the basis that the agreement dated April 25, 1978, had been duly approved by the Board for the assessment years 1979-80 to 1981-82. The Tribunal observed : ". . . . it is manifest that neither of the two authorities below had doubted the bona fides of the averments made. Both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement on a date earlier than that on which April 25, 1978." the agreement has been reduced to writing, please mention also such earlier date). A certified copy of the agreement was also annexed to the application. The Board accorded its approval to the above agreement by its letter dated November 3, 1978. The above letter, so far as it is relevant, reads "I am directed to refer to your application received with your letter No ..... dated May 1, 1978, and to convey the approval of the Board to the agreement entered into between you and Messrs. Yuka Investments Ltd., Hongkong, on April 25, 1978, for the purposes of section 80-O of the Income-tax Act, 1961, assessment years 1979-80 to 1981-82. . . ." It is evident from the above lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided or agreed to be made available or provided to such Government or enterprise by the assessee, or in consideration of technical services rendered or agreed to be rendered outside India to such Government or enterprise by the assessee, under an agreement approved by the Board in this behalf, and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange, there shall be allowed, in accordance with and subject to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrectness of the order of approval because none of them acts as an appellate authority over the Board in the matter of grant of approval. The Income-tax Officer is bound to accept the approval accorded to the agreement by the Board on its face value and to act accordingly. In the instant case, the Income-tax Officer and the Commissioner of Income-tax (Appeals) did just the contrary. The Tribunal was, therefore, justified in reversing their orders and accepting the claim of the assessee for relief under section 80-O of the Act. We do not find any infirmity in the above action of the Tribunal. In that view of the matter, we hold that the Tribunal was right in holding that the assessee was entitled to deduction under section 80-O of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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