Sabyasachi Mukharji, J. - (1.) Special leave granted.
(2.) This is an appeal from the judgment and order of the Division Bench of the High Court of Bombay whereby the Division Bench concurred with the judgment and order of the learned Single Judge of the Court. The respondent herein had entered into an agreement on or about 5th May, 1978 with Thai Rayon Company Limited at Thailand (hereinafter called the foreign company). It was engaged in the business of manufacturing and selling Stapple Fibres at Bangkok in Thailand. The agreement recited that the respondent as he was described was a technician holding a Bachelor's degree from the Massachusetts Institute of Technology, U.S.A. and has had several years of experience in the business of manufacturing and selling Staple Fibre through his association with companies engaged in similar business and the foreign Company as referred to in the agreement aforesaid as the 'employer' had approached him, i.e the technician to make available to the 'employer' his services in Bangkok on certain terms and conditions, inter alia, that the Thai Company would pay to the respondent remuneration of 12,000 per annum in quarterly instalments and it would be receivable at Bangkok. The agreement was for a period of three years with liberty to either party to terminate it after six months' notice. It was subject to the approval of the Governments of Thailand and India and other authorities, if any.
(3.) The respondent applied to the Central Government in India for its approval of his employment with the Thai Company under the agreement for the purpose of securing the benefit conferred by section 80RRA of the Income-tax Act, 1961 (hereinafter called 'the Act'). On June 8, 1979 the Government informed the respondent that it was unable to approve the employment with the Thai Rayon Company Limited, Bangkok, as per the terms and conditions contained in the agreement dated 5th May, 1978 for the purpose of section 80RRA of the Act as the section, according to Government contemplated rendering of service outside India in the status of an 'employee'. It was further stated that it was seen that the status of the respondent under the foreign employer was that of a 'consultant' and not of an 'employee'. Therefore, the remuneration contemplated under section 80RRA was from an employer and would not be applicable to the instant case of the respondent, according to the Government.;