Income Tax Appellate Tribunal - Ahmedabad
Dr. Dilip V. Mavlankar, Ahmedabad vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "C"
BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND
SHRI MAHAVIR SINGH, JUDICIAL MEMBER
Date of hearing:23.03.10 Drafted on: 23.03.10
ITA No.3764/AHD/2004
Assessment Year : 2001-2002
Dr. Dilip V. Mavlankar Vs. ACIT,
Nanavaty & Associates, Circle-13,
rd
A/18, 3 Floor, Narayan Natureview Building,
Chambers, Ashram Road, Ashram Road,
Ahmedabad-380009 Ahmedabad-380009
PAN/GIR No. : ABEPM 2691 J
(APPELLANT) .. (RESPONDENT)
Appellant by : Shri Tushar Hemani
Respondent by: Shri M.C.Pandit Sr. D.R.
ORDER
PER N.S.SAINI , ACCOUNTANT MEMBER :-
This is an appeal filed by the assessee against the order of the ld.CIT(Appeals)-XX, Ahmedabad, dated 29.07.2004.
2. At the time of the hearing, the Ld. A.R. submitted that the assessee filed concise ground of appeal on 11.11.2009 in place of the original grounds of appeal filed with the appeal memo on 23.12.2004 as the Ground of the appeal filed with the appeal memo were argumentative. He submitted that he will argue the revised ground of appeal only. The Ld. D.R. had no objection to the submissions made -2- by the Ld. A.R.. Therefore, the Ld. A.R. was allowed to argue the concise ground of appeal.
3. The ground nos.1, 3 and 4 of appeal of the assessee reads as under:-
1. Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in denying the deduction under section 80RR of the Act on the consulting income of Rs.6,09,765/-.
3. Alternatively and without prejudice, ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in denying deduction under section 80RRA of the Act on the consulting income of Rs.6,09,765/-.
4. Alternatively and without prejudice, ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in denying deduction under section 80O of the Act on the consulting income of Rs.6,09,765/-.
4. At the time of the hearing, Learned Authorised Representative of the assessee submitted that he is not pressing ground nos.1, 3 and 4 of the appeal. Hence, these grounds are dismissed as not pressed.
5. Ground no.2 of the appeal of the assessee reads as under:-
" 2. Alternatively and without prejudice, ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in denying deduction under section 80R of the Act on the consulting income of Rs.6,09,765/-."
6. The Learned Commissioner of Income Tax(Appeals) has decided this issue as under:-
"5. The appellant has alternatively claimed deduction u/s.80R or 80RR. The scope of section 80R, 80RR and 80RRA has been elaborated in the departmental circular No.762 dated 18-2-1998 as follows:-3-
'U/S.80R of the IT Act, a professor, a teacher, or a research worker rendering services abroad, is entitled for a deduction from remuneration received from a foreign university, institution etc. while computing his income chargeable to tax in India. This deduction is available to a resident being an Indian citizen.
U/S.80RR of the IT Act, a similar provision is available to an artist, playwright musician, actor, deriving income from foreign sources in exercise of his profession, even in India. This section is available to a resident in India who need not be an Indian citizen.
A similar deduction is available U/S.80RRA, to persons proceeding on assignments abroad and liable to pay tax in India on the entire remuneration received abroad. This deduction is available to senior citizen who is a resident".
5.2 I have considered the alternate claims of the appellant under section 80R/80RR. I find that the appellant does not qualify for deduction u/s. 80RR as he does not pursue any of the professions specified in the said section. As regards the claim of deduction under section 80R, the necessary condition to be fulfilled is that the assessee should be a Professor, Teacher, or Research Worker rendering service abroad in which case the deduction is admissible from the remuneration received from a foreign university, institution etc. In the case of the appellant, I find that though he is a professor, he is rendering service as a professor in IIM and the remuneration received by him is from IIM for assignments carried out by him outside India as per the directives of the IIM. Therefore, the appellant has neither rendered service as a professor in a foreign university etc. nor has he received any remuneration from a foreign university/ educational institution. Hence, since the requirements of section 80R are not fulfilled in the case of the appellant, I find that his alternate claim for deduction u/s.80R is not admissible. Hence, appeal is rejected on this ground."
-4-7. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. The assessee is a professor in Indian Institute of Management and received salary from that institute. During the year under consideration, the assessee claimed deduction under section 80RR of the Act for Rs.3,65,850/- in the revised return of income filed by him. The Learned Assessing Officer observed that the assessee does not satisfy the conditions of section 80RR of the Act and therefore, disallowed the claim made by the assessee. The Learned Assessing Officer observed that in Form No.10H, the name of the assessee mentioned is Indian Institute of Management, Vastrapur, Ahmedabad and not the assessee. In appeal before the Learned Commissioner of Income Tax, the assessee made an alternative claim for deduction under section 80R of the Act which was also considered by the Learned Commissioner of Income Tax(Appeals) as not allowable to the assessee.
8. Before us, the Learned Authorised Representative of the assessee contended that the claim of the assessee is to be allowed under section 80R of the Act. He submitted as under:-
"Deduction under section 80R:
"o The appellant fulfills all the conditions enumerated in the section viz.
• He is a professor with IIM;
• He rendered services outside India;
• Services were rendered in his capacity as professor or teacher or research worker;
• He received remuneration in convertible foreign exchange;-5-
o Ld. CIT(A) has rejected the case of the appellant on the ground that he has neither rendered any services in his capacity as a professor nor has he received any remuneration from a foreign university.
o The appellant submits that the services have been rendered by the appellant in his capacity as professor/teacher/research worker in such university. Only professors or visiting professors or teachers or consultants/research workers are invited to take lectures in such reputed universities. An assessee need not be a permanent professor/teacher in such university. He could be a permanent professor in IIM and he could be a visiting / invitee professor / teacher to share his expertise.
o As regards non-receipt of remuneration from such universities is concerned, the same is factually incorrect as the appellant has received such remuneration from foreign university that too in foreign exchange."
9. We find that the assessee has filed at page 2 and 3 of the paper book the details of services rendered for which remuneration was received by the assessee in respect of which the deduction under section 80R is allowable according to him. The details of services are as under:-
"Annexure I Dr. Dileep Mavalankar AY 2001-2002 Details of consultancy work done and incomes from consultancy through IIM Sr. Name of Nature of Payment Gross Institute Facuty Net Date of Fees organization consultancy received consulta share in share in amount payment received services directly ncy fee fees fees received by Institute provided or not t 1 Director Project Evaluation of No- 112,500 37,500 75,000 49,125 17-4- Rupees Support Model Hospital payment 2000 unit, PSH Project in Surat via IIM project, Gujarat.
2 International Capacity No- 120,000 40,000 80,000 52,400 25-5- US Dollars
Health Policy building and payment 2000
Program, policy research via IIM
-6-
Washingto DC, training for
USA' Hearth Policy
3 AMDD project of Consultancy to No- 240,272 80,091 160,18 104,921 13-10- US Dollars
Columbia improve project payment 1 2000
University NY design and via IIM
management.
4 AMDD project of Consultancy to No- 25,000 - 25,000 12,875 18-10- US Dollars
Columbia improve project Payment 2000
University NY design and via IIM
management
5 AMDD project of Consultancy to No- 212,992 70,997 141,99 93,005 2/1/01 US Dollars
Columbia improve project payment 5
University NY design and via IIM
management
6 AMDD project of Consultancy to No- 180,379 90,189 119,69 64,179 30-3- US Dollars
Columbia improve project payment 0 200
University NY design and via IIM
management
Sub-Total 891,143 318,777 601,86 376,505
6
* includes recovery of other dues.
** Net fee paid after IT deduction.
Annexure I
Dr. Dileep Mavalankar
AY 2001-2002
Details of consultancy done and income received directly.
Sr. Name of Nature of Payment Gross Amount Net Date of Cheque
organization consultancy services received fee paid to amount payment Nos&
provided directly received the receive amount
or not Institute d ** received in
1 AMDD project Consultancy for Yes- 82,899 41,457 41,449 11/5/00 811839 US
Columbia Meeting in Nepal at Directly dollars
University NY UNICEF office - Jan paid
17-21-2000
2 Benet Coleman Honorarium for Yes- 2,000 1,000 1,000 18/9/00 589100
and co. article published in Directly Rupees
Times of India
3 Lambda Honorarium for Yes Paid 4,000 2,000 2,000 19/6/00, various
Therapeutic participation in the directly 17/11/00, Ruppees
Research, Ethics meetings of Ethics 18/1/01,
committee committee. 11/5/01
4 Some Lalit Honorarius for Yes- 16,000 8,000 8,000 16/1/01 33379
Management teaching a course Directly rupees
Institute
5 MacArthur Honorarium for Yes- 15,000 7,500 7,500 29/12/00 189667
Foundation taking sessions in Dirtily rupees
meeting in Karala
-7-
6 MacArthur Fees for writing a Yes Paid 17,718 8,859 8,859 28/11/00 130089
Foundation. review paper directly rupees
7 Various Honorarium for Yes Paid 7,000 3,500 3,500 Cash NA Rupees
organizations lectures at IIM dirtily
Calcutta, CMO/DHO
training, MNGO,
NID Ahmedabad.
Sub-Total. 144,617 72,316 72,308
** As per IIM rules 50% of consultancy amount is to be paid back to IIM as share and overheads of the institute.
The assessee filed at page 1 of the paper book a certificate issued by Indian Institute of Management, Vastrapur, Ahmedabad, which evidences that the salary paid by them to the assessee includes Rs.6,01,866/- towards payment of consultancy fee from foreign assignments. The same is as under:-
"INDIAN INSTITUTE OF MANAGEMENT, Vastrapur, Ahmedabad 380 015 TO WHOMSOEVER IT MAY CONCERN This is to certify that Gross Salary of Rs.9,01,148/- received by Prof.Mavalankar D. V. from Indian Institute of Management, Ahmedabad during the financial year 2000-2001 ('as certified in Form No.16)' includes Rs.6,01,866/- towards payment of consultancy fee from the following assignment.
-------------------------------------------------------------------------------------------------- Sr.No. Organisation Gross I.Tax Net Amt. Date of-
fees Paid Payment
--------------------------------------------------------------------------------------------------
1. Director PSU, PSH Project 75,000 25875 49125 17-04-2000
2. International Health Polity 80,000 27600 52400 25-05-2000 Programme
3. Columbia University; 160181 55260 104921 13-10-2000
4. Columbia University; 25000 12125 12875 18-10-2000
5. Columbia University 141995 48990 93005 02-01-2001
6. Columbia University 119690 55511 64179 30-03-2001
------------------------------------
Total 601866 225361 376505
------------------------------------
02-04-2002 Sd/-
Accounts Officer * includes recovery of Rs.3500/- towards other dues to the Institute. ** includes recovery of Rs.13500/- towards other dues to the Institute."-8-
10. In order to adjudicate the issue under consideration, it is deemed expedient to extract the relevant provisions of section 80R as under:-
"80R. Deduction in respect of remuneration from certain foreign sources in the case of professors, teachers, etc.--Where the gross total income of an individual who is a citizen of India includes any remuneration received by him outside India from any university or other educational institution established outside India or any other association or body established outside India, for any service rendered by him during his stay outside India in his capacity as a professor, teacher or research worker in such university, institution, association or body, there shall be allowed, in computing the total income of the individual, 2a deduction from such remuneration of an amount equal to--
(i) sixty per cent. of such remuneration for an assessment year beginning on the 1st day of April, 2001 ;
(ii) forty-five per cent. of such remuneration for an assessment year beginning on the 1st day of April, 2002 ;
(iii) thirty per cent. of such remuneration for an assessment year beginning on the 1st day of April, 2003 ;
(iv) fifteen per cent. of such remuneration for an assessment year beginning on the 1st day of April, 2004, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.
Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. Explanation.--For the purposes of this section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
1. FA 1999 w.e.f. 1-6-1999."
-9-11. A reading of the aforesaid provision shows that,(i) remuneration should be received by the assessee outside India, (ii) for services rendered by him in his capacity as a professor, teacher or research worker in any university or other educational institution established outside India. We find that no material has been brought on record by the assessee to show that he rendered services to any university or educational institution established outside India in the capacity of professor, teacher or research worker in such university or institution. The details filed at page nos. 2 to 3 of the paper book shows that the remuneration was received in respect of services rendered in the capacity of a consultant and not in the capacity of professor, teacher or research worker in the university or educational institution established outside India. Further, it is also observed from page no.1 of the paper book that the amount in question was considered by Indian Institute of Management, Vastrapur, Ahmedabad as part of salary paid by them to the assessee and thus, the same was not a remuneration received by the assessee outside India. From the order of assessment, it is observed that the Learned Assessing Officer has stated that Form No.10H filed by the assessee bears a name of Indian Institute of Management, Vastrapur, Ahmedabad and not of the assessee. The assessee has brought no material before us to controvert the above finding of the Learned Commissioner of Income Tax(Appeals). In view of the above facts and circumstances of the case, we are unable to agree with the contention of the Learned Authorised Representative of the assessee that the remuneration was received by the assessee outside India and was for rendering of services to a university or educational institution established outside India as a professor, teacher or research worker in
- 10 -
such institution and assessee furnished certificate in Form No.10H in respect of his own income. Thus, we do not find any error in the order of the Learned Commissioner of Income Tax(Appeals). It is confirmed and the ground of appeal of the assessee is dismissed.
12. In the result, the appeal of the assessee is dismissed.
Order signed, dated and pronounced in the Court on 26/03/2010.
Sd/- Sd/-
( MAHAVIR SINGH) ( N.S. SAINI )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 26/03/2010
Paras
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT Concerned
4. The ld. CIT(Appeals)
5. The DR, Ahmedabad Bench
6. The Guard File.
BY ORDER,
स᭜यािपत ᮧित //True Copy//
(Dy./Asstt.Registrar), ITAT, Ahmedabad