- (1.) THE Tribunal, Allahabad, has referred the following two questions of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as the Act) for opinion to this Court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the living allowance was a special allowance liable to be exempt under s. 10(14) of the IT Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that living allowance was not income liable to tax under s. 56 as income from other sources -
(2.) THE reference relates to the asst. yrs. 1978 -79 and 1979 -80.
(3.) BRIEFLY stated the facts giving rise to the present reference are as follows : M/s Indian Farmers Fertilizers Co -operation Ltd. (hereinafter called 'IFFCO'), Phulpur, Allahabad, entered into an made for providing certain advisory services in India for construction, erection and procurement of equipment for Ammonia Plant at Phulpur in Allahabad District. As per agreement, Mr. W.F. Bogards and others came to India and Expatriate personnels per diem rates as prescribed in the agreement. Thereafter, Expatriate personnels were paid their salary in USA by KIL. However, according to art. 4.03 of the agreement, IFFCO was to pay living allowance directly to the personnels. According to the same article, other benefits of furnished accommodation, conveyance, water, electricity, gas, etc., were also to be provided by the IFFCO. The AO held this benefit extended to the Expatriate personnels as income from other sources under s. 56 of the IT Act, as the same was not paid by the employer.;