COMMISSIONER OF INCOME TAX Vs. PAULINE E KING

JUDGEMENT

(1.) FOR the four assessment years 1974-75 to 1977-78, the income of the assessee was grossed up and tax levied thereon by the Income-tax Officer. That mode of calculation was found to be erroneous by the Tribunal. It held that there was no material before the authority from which it could be said that the salary paid to the assessee who was a nurse employed by the American Madura Mission of the United Church Board for World Ministries and who had served at the Christian Medical College Hospital at Vellore had been granted tax-free income by her employers. The assessee was a national of the United States and a nurse by profession. She had filed returns for the years 1974-78 showing the income of Rs. 34,653 for the assessment year 1974-75, Rs. 40,508 for the assessment year 1975-76, Rs. 67,741 for the assessment year 1976-77 and Rs. 48,035 for the assessment year 1977-78. At the time of filing the return, the amount of tax payable on the income aforementioned is, viz., Rs. 9,574, Rs. 12,082, Rs. 17,450 and Rs. 19,883, were shown as income-tax allowance. There was no written contract between her and the hospital which paid her the salary.

(2.) AT the instance of the Revenue, the question referred to us on the facts set out above is :