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T.K. Sharma, J.M. This appeal filed by the assessee is directed against the order dated 19-2-2001 of the CIT (A)-I, Mumbai, upholding the disallowance of deduction of Rs. 1,79,608 being 75% of total receipt of Rs. 2,39,477 claimed by the assessee under section 80RR of the Income Tax Act, 1961, pertaining to the assessment year 1997-98.

2. The facts in brief are that the assessee is an individual and derives professional income from the work of music direction of films. For the assessment year under appeal, the assessee claimed deduction under section 80RR amounting to Rs. 1,79,608 on royalty income of Rs. 2,39,477. This was disallowed by the assessing officer in the assessment order observing as under:

5. At the time of hearing on behalf of the assessee, Sh. D.J. Thakkar appeared and filed following documents in the form of paper book

1. Order for assessment year 1995-96 under section 143(3).

2. Computation of income for assessment year 1995-96.

3. Intimation under section 143(1)(a) for assessment year 1996-97.

4. Document and Declaration of the Indian Performing Right Society Ltd.

6. The counsel for the assessee submitted that in the assessment year 1995-96, the assessing officer framed the assessment under section 143(3) and allowed the deduction under section 80RR amounting to Rs. 45,109 claimed by the assessee in the return of income. For the assessment year 1996-97 also, the assessee claimed deduction under section 80RR, which was also allowed in the intimation issued on 3-2-1997 under section 143(1)(a). The counsel also submitted that a certificate dated 14-2-2001 obtained from the Indian Performing Right Society Ltd., was also filed before the assessing officer, wherein, they have certified that Indian Performing Right Society Ltd. receives from its overseas affiliated Societies is also brought into India on behalf of its Members in Convertible Foreign Exchange as required under section 80RR of the Income Tax Act, 1961.

14. We also found that the assessing officer has stated that no certificate under section 10H was filed by the assessee alongwith the return of income. It is not known whether the same is filed during the course of assessment proceedings or before the CIT (A) because the assessee has not furnished a copy of the same before us. In the impugned order, the CIT (A) upheld the action of the assessing officer disallowing the deduction under section 80RR of the Act on the ground that income question is not derived from exercise of assessee's profession because the assessee exercised his profession when he first produced music and foreign exchange was remitted to India. On a plain reading of section 80RR, we found that this section provide that deduction is to be allowed in respect of professional income from foreign source as mentioned in the section. It is not necessary for the assessee to render physical service outside India, which is a requisite condition for allowance of deduction under. Section 80RRA. Under section 80RR, professional income can be derived by exercising profession in India, but it should be from foreign source. We are, therefore, of the view that in case the assessee has received through medium of cassettes and records from a foreign government or any person non-resident Indian as provided in section 80RR, the assessee is eligible under this section. In the impugned order, the learned CIT (A) has not examined the various other conditions including the agreement of the assessee if any with the Indian Performing Right Society Ltd. The learned CIT (A) has also not verified whether the assessee has furnished Form No. 10H or brought into India the income earned by him or on his behalf in convertible foreign exchange within six months or extended period of time as provided in section 80RR.

15. In view of the foregoings, we set aside the order of the CIT (A) and direct him to examine the various conditions mentioned in section 80RR because the income earned by the assessee for playing cassettes from foreign source as mentioned in section 80RR is eligible for deduction subject to fulfilment of various conditions enumerated by us hereinabove.

16. Before parting with we may add that the principle of fresh adjudication are not applicable to the income-tax proceedings. Therefore, we do not consider it necessary to go into the details/circumstances/facts under which the assessing officer allowed the deduction under section 80RR in earlier and subsequent years as stated by the assessee. At any rate, this contention was not raised by the assessee before the CIT (A). Therefore, the CIT (A) is at liberty to examine this aspect also. The CIT (A) will readjudicate the issue involved in this appeal afresh after giving opportunity of being heard to both the sides.