COMMISSIONER OF INCOME TAX Vs. TARUN R TAHILIANI

JUDGEMENT

(1.) These appeals pertain to Assessment Years 1999-2000, 2000-01 and 2001-02. The issue is whether the assessee, who is a dress designer, is entitled to a deduction under Section 80RR of the Income Tax Act, 1961. The appeals by the Revenue under Section 260A are admitted on the following substantial question of law:

(2.) The assessee in his return of income for Assessment Years 1999-2000, 2000-01 and 2001-02 claimed a deduction under Section 80RR. The deduction was claimed in respect of the design fees received by the assessee from persons not resident in India in convertible foreign exchange. The Assessing Officer rejected the claim of the assessee, holding that the assessee was not an author, or a playwright, artist, musician, actor or sportsman and hence did not fall within one of the categories to whom a deduction can be allowed. Appeals filed by the assessee were dismissed by the Commissioner (Appeals). The Income Tax Appellate Tribunal allowed the appeal for Assessment Year 2001-02 by an order dated 31 October 2008. The Tribunal followed that order while deciding the appeals for Assessment Years 1999-2000 and 2000-01 on 16 December 2008. The Revenue is in appeal under Section 260A.

(3.) Counsel appearing on behalf of the Revenue submitted that (i) The expression "artist" in Section 80RR must be restricted to the field of fine arts; (ii) The purpose of the provision is to showcase Indian culture abroad; and (iii) The field of design is an area of technical expertise and not an art form. On this foundation Counsel urged that the assessee, who is a dress designer, is not an artist under Section 80RR.