Law:

Section:

Section 80RRA of the Income-tax Act, 1961, read with article 226 of the Constitution of India - Deductions - Remuneration received for services rendered outside India - Petitioner-technicians claim was rejected on ground that he was an independent contractor acting as consultant and not as employee - Whether benefit of section 80RRA is restricted to remittance of salaries alone and to cases of employees only - Held, no - Whether in view of decision of Supreme Court in case of CBDT v. Aditya V. Birla [1988] 170 ITR 137/ 36 Taxman 9 , Petitioner was fully entitled to benefits of section 80RRA - Held, yes FACTS The petitioner was employed as a technician on certain construction work in Iran and his status was that of an independent contractor. His claim for deduction under section 80RRA was rejected on the ground that he was working as an independent contractor acting as a consultant and not as an employee. On petition : HELD On a bare perusal of the section, it would be clear that the petitioner fell within its contemplation. What had obviously escaped the attention of the respondent, and had resulted in their erroneous interpretation of the section, was the absence of the use of the words 'employees' and/or 'salary'. The wordings of the section as also its palpable purpose, i.e., attracting the repatriation of funds/remuneration earned by Indian citizens abroad and thereby augmenting Indian foreign currency holding, make it abundantly clear that the incentive is neither restricted to the remittance of salaries alone, nor to the cases of employees only. Had this been the intendment, these words could have been used by the Act. This section also provides relief to an Indian citizen against double taxation. The matter was no longer res integra because of the pronouncement of the Supreme Court in CBDT v. Aditya V. Birla [1988] 170 ITR 137/ 36 Taxman 9 . The Supreme Court observed that section 80RRA uses the expression 'remuneration' and not 'salary' to be entitled to deduction and there is no warrant to restrict the meaning of the expression 'remuneration' only to salary received by an employee abroad. That in principle also, it is not possible to find any rationale…

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