Law:

Section:

Section 9 of the Income-tax Act, 1961 - Income - Deemed to accrue or arise in India - Assessee was a non-resident foreign technician employed by employer - foreign company which executed contracts in India providing for both on-periods and off-periods - Tribunal held that salary paid to assessee for off period outside India was not chargeable to tax under section 9(1)(ii) and free boarding facility provided by employer at rig site could not be construed to be a perquisite - Whether since assessee had to undergo training during off-period which was directly connected with services rendered in India, as it made him mentally and physically fit, salary for off-period was income earned in India under section 9(1)(ii) - Held, yes Section 17(2) of the Income-tax Act, 1961 - Salaries - Perquisites - Whether on facts stated under heading 'Income - Deemed to accrue or arise in India' since assessee had to work on rig which was hazardous, arduous and continuous, free food and beverages was a necessity and not a luxury or perquisite and, therefore, its value could not be added to income of assessee - Held, yes Section 234B of the Income-tax Act, 1961 - Interest chargeable - Whether where a bona fide dispute was pending, imposition of interest upon assessee-employee under section 234B was not justified without hearing and without reasons - Held, yes FACTS The assessee was a non-resident foreign technician employed by the employer-foreign company which in the year under consideration executed contracts in India. During the year under consideration, the assessee derived income from salaries from the foreign company. The contract in question provided for on-period and off-period. The Tribunal held that the salary paid to the assessee for the off-period outside India, under the contract of employment, was not chargeable to tax under section 9(1)(ii), and free boarding facility provided by the employer at the rig site could not be construed to be a perquisite. Further, it also directed the Assessing Officer to charge interest under section 234B. On appeal: HELD Section 9 is a deeming section. It brings in certain types of incomes, which may not come under section 5, into the…

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