COMMISSIONER OF INCOME TAX Vs. PREM BANDHU GUPTA

JUDGEMENT

(1.) The assessed is an individual, who for the two relevant years in question, had claimed that his income was exempt from Indian Income Tax, on account of the fact that he was in receipt of salary from the United States of America Agency for International Development, America Embassy. It was further stated that his salary was being paid in connection with a Technical Co-operation Assistance Programme and Project. The accompanying certificate from the employer showed that he was assigned duties from April, 1969, to March, 1970, in India in connection with a Technical Co-operation Assistance Programme and Project as per the agreement between the Government of India and the Government of the United States of America.

(2.) The Income Tax Officer on an interpretation of the agreement thought that as the assessed was an Indian national, he was to be taxed and hence his prayer was disallowed. And this decision was affirmed by the Appellate Assistance Commissioner on the basis of a letter issued by the Agency for International Development dated March 8, 1971, clarifying that the agreement only appealed to U.S.A. citizens and not to Indian nationals.

(3.) The assessed appealed to the Tribunal which accepted his contention and held that the agreement covered all the employees of the Government of the United States of America irrespective of whether they were U.S.A. nationals or Indian nationals.