BHAGWATILAL G SHAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Ahmedabad Bench "A" has referred the following four questions for the opinion of this Court under Section 256(1) of the Income Tax Act, 1961 (the Act) at the instance of the assessee. "(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the status of the assessee was not "Resident but not ordinarily Resident" and, therefore, the fees of Rs.14,860/- which has accrued outside India is not exempt under the proviso to section 5(1)(c) of the I.T.Act, 1961? (2) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in refusing deduction u/s 80-R of the I.T. Act, 1961 and whether its interpretation of section 80-R of the I.T. Act, 1961 and whether its interpretation of section 80-R is correct in law? (3) Whether on the facts and in the circumstances of the case, the compensation of Rs.30,000/- being compensation paid by non-resident Mehta Group for loss of employment in India and "profit in lieu of salary" within the meaning of the expression in Section 17(3)(1) and, therefore, taxable as salary u/s 15? (4) Whether the Tribunal was right in law in taxing in the hands of the assessee Rs.7,500/- paid to Advocate Shri Raval for his services in respect of Girnar Scooter Project?"

(2.) The learned advocate for the applicant, at the outset, states that he does not press questions No.1 and 2 under instructions. The said questions are, therefore, left unanswered.

(3.) The Assessment Year is 1982-83 and the relevant accounting period is the financial year ended on 31st March 1982. The assessee, an individual claimed an amount of Rs.30,000/- received as compensation as being not taxable under the Act in the return of income filed on 10th May 1982. The assessee had received fees from Gujarat Small Industries Corporation, Girnar Scooter Project a sum of Rs.15,000/- against which he had claimed deduction of an amount of Rs.7,500/- paid to one Shri N.U.Raval. The assessing officer brought the amount of Rs.30,000/- to tax and disallowed the claim of deduction of Rs.7,500/-. The assessee carried the matter in appeal before the CIT (Appeals), who, for the reasons stated in his order dated 21st July 1987, held that the amount of Rs.30,000/- was rightly taxed as income under the head "salaries". In relation to the claim of deduction of Rs.7,500/-, the CIT (Appeals) confirmed the same by treating it as an application of income.