COMMISSIONER OF INCOME TAX Vs. MURTHY C S

JUDGEMENT

(1.) This reference arising under section 256(1) of the Income-tax Act, 1961 (for short "the Act "), made by the Income-tax Appellate Tribunal (for short " the Tribunal "), at the instance of the Commissioner of Income-tax raises a short but interesting question. The matter relates to the income-tax assessment year 1976-77 and the question referred for the consideration of this court is:

(2.) We shall notice the relevant facts.

(3.) The assessee was employed as a dental surgeon in the Osmania Dental College, Hyderabad. He went on deputation to Iran. In the previous year relevant to the income-tax assessment year 1976-77, the assessee received salary of Rs. 64,470 from the Government of Iran wherefrom tax of Rs. 5,974 was deducted under the law in force in that country. The residential status of the assessee for the assessment year 1976-77 is " resident and ordinarily resident ", as indicated in the assessment order dated March 26, 1980. Under section 5 of the Act, the total income of any previous year of a person who is resident in India includes, inter alia, all income accruing or arising to him outside India during such year (section 5(1)(c) of the Act). Consequently, the salary income accruing or arising to the assessee outside India in Iran was liable to be included in the total income of the assessee for the purpose of assessment to income-tax in India. There is no dispute that the aforesaid salary income accruing or arising to the assessee in Iran fell to be included in the assessee's total income for the income-tax assessment year 1976-77.