COMMISSIONER OF INCOME TAX Vs. PGNATALE S G

JUDGEMENT

(1.) IN this case at the instance of the Revenue the following two questions have been referred to us for our opinion :

(2.) THE facts leading to this reference are as follows : We are concerned with the asst. year 1972 73. The assessee is an individual and he is not ordinarily resident in India. The assessment relates to the income under the head "Salaries" and the period from July 31, 1971, to March 31, 1972, is the portion of the previous year which is under consideration. The ITO assessed the income of the assessee at Rs. 39,100 against the declared nil total income of the assessee. The assessee was an employee of a French company who, pursuant to an agreement dated June 23, 1970, entered into by the French company with the Gujarat State Fertilizer Co. Ltd., made available to the Gujarat State Fertilizer Co. Ltd. the services of the assessee. The assessee accordingly worked in India and rendered services in India in the shape of supervisory and advisory assistance to the Gujarat State Fertilizer Co. (hereinafter referred to as "the Gujarat company"). In lieu of the said services the assessee was to be paid outside India by the French company certain fixed emoluments in terms of para. 3 of the French company's letter dated June 30, 1971. These emoluments are referred to as retention remuneration in the letter. The letter of June 30, 1971, contains the terms of employment of the assessee during his assignment in India. Besides the retention remuneration the assessee was also to get certain daily allowance according to the scale mentioned in the letter and also in the agreement between the French company and the Gujarat company. Under the terms of the letter of June 30, 1971, the assessee was also to be entitled to other facilities and benefits as admissible to the employees of his rank in France.

(3.) AGAINST this decision of the ITO the assessee went in appeal to the AAC. The appeal was dismissed by the AAC. While dismissing the appeal the AAC followed his own decision in the case of another similar employee, one P.A. Mascagni.