1. The applicant is currently employed with SAP India Systems, Applications and Products In Data Processing Private Limited ("SAP India"). SAP India is an Indian subsidiary of SAP Germany. SAP India was incorporated on 14th March, 1996, and is engaged in the business of duplication and distribution of SAP AG's proprietary R/3 software in India. The R/3 software is an application software, which is used to integrate various business functions such as inventory management, quality management, etc. with the main financial system of the user.
2. The applicant is a resident of USA and was on regular employment with SAP Singapore, another company of the said group. SAP Singapore has deputed her to SAP India as its President for a period of 2 years commencing from 1st April, 1999.
3. The duties assigned to her as President SAP India included coordinating the customization of the SAP software to suit customers requirement, training personnel in connection with the high end technology operations of SAP India etc. She holds a master's degree in mechanical engineering and has 25 years of work experience in the information technology.
4. The application is made for claiming the benefit of the status of the "Technician" under s. 10(5B) of the IT Act, so that the tax paid by the SAP India should not be treated as perquisite in the hands of the employee applicant. Information technology is a field notified for the purpose of s. 10(5B) of the IT Act.
5. The jurisdictional CIT has opined that the applicant though technically qualified is carrying out administrative functions in India and her technical knowledge is not utilised in the business carried out in India. Therefore, it was argued that she is not qualified for the benefit of the s. 10(5B) as "technician" On the other hand, it was contended on behalf of the applicant that she is accountable for providing software as per the specifications and needs of the customers which requires utilisation of her technical skills. Reliance was also placed upon the earlier rulings of the Authority where a liberal interpretation has been made about the utilisation of the knowledge while allowing the benefit of s. 10(5B) to the respective applicants.
6. On consideration of the submissions made on behalf of both the sides we are of the view that the applicant is entitled for the benefit of the s. 10(5B) as per her technical qualifications and experience in the field of information technology. Therefore, the questions raised in the application are answered in the affirmative as under: (a) Whether the applicant will qualify as a "technician" in Yes accordance with s. 10(5B) of the Act, and accordingly.
(b) Whether, the taxes paid by the employer on behalf of the Yes applicant would be exempt from taxation under s. 10(5B) of the Act, for a period of forty-eight months commencing from the date of arrival in India.