INCOME TAX OFFICER Vs. B K JAIN
INCOME TAX APPELLATE TRIBUNAL
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(1.) THIS is an appeal from DC(Appeals)'s order dated 21-1-1991 cancelling the demand of income-tax as raised by the Assessing Officer (AO) on computation of assessee's total income for assessment year 1988-89.
(2.) Briefly stated the relevant facts are that during the year under consideration the assessee was in the employment of the State of Rajasthan as a Professor-Doctor in S.P. Medical College, Bikaner. Having been sponsored by the Central Government, the assessee served the Socialist People Libyan Arab, Jamahir Yah, Al-Fateh University, of that country at Tripoli from 6-2-1988 to 31-3-1988 and therefrom he received Salary amounting to 1549 Libyan Dollars equivalent to Rs. 77,450 in Indian currency and paid TDS of Rs. 21,150 in foreign currency.
The Central Government of India had entered into an Agreement with the Libyan Government for the avoidance of double taxation of income under the Income-tax Act, 1961 ('the Act') and under the corresponding law in force in that country. Article 20 of such Agreement provided as under :-
When a resident of a Contracting State derives income which has also suffered tax in the other Contracting State, the first mentioned State shall allow a deduction from its tax on the income of that person equal to the tax in the other Contracting State provided that the deduction shall not exceed that part of the tax as computed before the deduction is given which is applicable to the income taxed in the other Contracting State.
(3.) THE assessee filed the return of his income on 5-3-1990 for assessment year 1988-89 declaring his Income at Rs. 61,390 which was computed as under :-
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