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TMI Blog1984 (2) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... penses as pertaining to the consultancy fees of Rs. 7,04,225. 3. The assessee is a private limited company deriving income from providing technical advice to its clients both in India and abroad. During the year under consideration, the assessee received a sum of Rs. 7,04,225 as fees for the consultancy services rendered to a foreign party. The assessee also earned interest of Rs. 15,990 on moneys advanced. In the return of income filed by the assessee, relief under section 80-O of the Income-tax Act, 1961 ('the Act') was claimed on the entire income. But, as per the assessment order, the assessee's representative claimed in course of assessment proceedings, that an expenditure of Rs. 26,701 should be regarded as expenses for purposes othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es between foreign services and Indian services as made by the assessee was quite fair and should have been accepted. In other words, he upheld the contention of the assessee that while computing the relief under section 80-O the net amount should be taken by reducing a lower amount of expenditure and not the entire expenditure from the foreign consultancy fees. That lower amount of expenditure should be arrived at after deducting the expenses attributable to Indian services from the total expenditure. The assessee also raised an alternative contention to the effect that the gross income from consultancy without any deduction therefrom towards expenditure qualified for exemption. It was urged that section 80AB of the Act was introduced with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o connection between the expenses incurred for earning the fees in India and the fees actually earned outside India. Without prejudice to the above he urged that in view of the decision of the Supreme Court in the case of Cloth Traders (P.) Ltd., the relief should have been given on the gross fees without deducting any expenses therefrom. He pointed out that section 80AB did not apply to the year under consideration. He urged that it was open to him to urge this point because it has been decided against him by the Commissioner (Appeals). He relied on rule 27 of the Income-tax Appellate Tribunal Rules in this connection, as well as the decision of the Bombay High Court in the case of B.R. Bamasi v. CIT [1972] 83 ITR 223. Finally, he urged th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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