This appeal concerns taxation of certain Daily Allowance received by assessee. assessee is foreign technician and under terms of agreement between Indian company and his foreign employer assessee was entitled to daily allowance of Rs. 310 during his stay in India which was from 24th Nov., 1978 to 31st March, 1979. assessee received Rs. 39,680 as total of this allowance. assessee filed his return in status of resident but not ordinarily resident. He claimed deduction in respect of half of this sum under s. 10(14) of Act which ITO rejected. In appeal assessee claimed full amount. first question before AAC was whether he was entitled to enhance his claim as additional ground. AAC has entertained that ground and granted full deduction as claimed by assessee. Department is aggrieved in respect of both these points. Before us it argued on behalf of Revenue that additional ground should not have been entertained and reliance was placed on decision of Supreme Court in case of Addl. CIT vs. Gujargravures P. Ltd. 1978 CTR (SC) 1: 1978 111 ITR 1 (SC). However all facts necessary to decide that issue are available on record and so said decision does not prevent its consideration. Therefore on this point we hold that AAC was right in entertaining additional ground. next question is regarding actual deduction which should have been allowed on merits. ld. D.R. relied upon Expln. to s. 9(1) (ii) which states as follows: Explanation: For removal of doubts it is hereby declared that income of nature referred to in this clause payable for service rendered in India shall be regarded as income earned in India. This Explanation has been enacted by Finance Act, 1983 and given retrospective effect from 1st April, 1979. Therefore, according to him, this allowance was income received by assessee and was liable to tax as such. On behalf of assessee it was pointed out that his accounting year ended on 31st March, 1979 and so amendment which came into effect form 1st April, 1979 was not applicable, relying upon decisions in cases of Asstt. Commissioner of Urban Land Tax, Madras vs. Buckingham and Carnatic Co. Ltd (1970) 75 ITR 603 (SC) and ITO vs. Induprasad Dev Shanker Bhatt (1969) 72 ITR 595 (SC). In case of Buckingham and Carnatic Co. (supra) Court was concerned with applicability of State Act which was given retrospective effect from 1st July, 1963. Court held that Act was applicable and tax could be levied on and from that date. However it has been laid down in case of Karimtharuvi Tea Estate Ltd. vs. State of Kerala (1960) 60 ITR 262 (SC) that provisions of taxing statute would be applicable for assessment year in question and since assessment year in this case started from 1st April, 1979 Explanation would be applicable. next question is regarding applicability of s. 10 (14) which is as follows: " any special allowance or benefit not being in nature of entertainment allowance or other perquisite within meaning of cl. (2) of s. 17, specifically granted to meet expenses wholly, necessarily and exclusively, incurred in performance of duties of office or employment or profit to extent to which such expenses are actually incurred for that purpose". (Explanation: For removal of doubts, it is hereby declared that any allowance granted to assessee to meet his personal expenses at place where duties of his office or employment of profit are ordinarily performed by him or at place where he ordinarily resides shall not be regarded, for purposes of this clause as special allowance granted to meet expenses wholly necessarily and exclusively incurred in performance of such duties;)" On behalf of assessee it was argued that Gujarat High Court decision in case of CIT vs. S.G. Pgnatale (1980) 16 CTR (Guj) 337: (1980) 124 ITR 319 (Guj) was applicable in so far as it laid down that living allowance is not perquisite and therefore it was not salary. We find that this is correct. Secondly it was also argued that assessee was employee of foreign company, he continued to be such even while in India and received salary in foreign currency. From terms of agreement between Indian company and that foreign employer, it could be seen that this amount was variable. Therefore, this was not salary. Again we accept this contention. In view of these considerations question of applicability of s. 10 (14) does not survive and therefore it is not necessary for assessee to prove expenses actually incurred. In result we hold that this amount of maintenance allowance cannot be added to income of assessee. appeal is rejected. *** INCOME TAX OFFICER v. PETER RASENAK