LUCAS TVS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THREE common questions of law have been referred to us at the instance of the assessee relating to its two assessment years 1982-83 and 1983-84 for our consideration :

(2.) THE assessee is a company engaged in the manufacture of automobile electrical equipments. THE first two questions relate to the interpretation of Section 40A(5)(b)/40(c) of the Income-tax Act in relation to the determination of the amount of disallowance to be disallowed under the above-said provisions. THE claim of the assessee was that the entire remuneration paid to its foreign directors and employees should altogether go out of the reckoning to determine the ceiling under Section 40A(5) or 40(c) of the Act on the ground that it was an exempted income. THE Tribunal, however, has taken a view that the exclusion under the above provision would be confined to the amount actually exempted and not the entire remuneration paid to the foreign technician. THE assessee has challenged the above finding of the Appellate Tribunal and, hence, the first two questions of law relate to the extent of exemption available under Sections 40A(5) and 40(c) of the Act.