2012 (6) TMI 880 - AT - Income Tax

Summary

Issues involved:
The only issue involved is against the deletion of addition of Rs. 22,29,385/- made by the Assessing Officer by holding that the remunerations received by the assessee in respect of the employment in Russia and Tanzania are not taxable in India under the provisions of section 5(2)(a) of the Income-tax Act, 1961.

In this case, the Appellate Tribunal ITAT Delhi considered an appeal filed by the revenue against the order of the CIT (Appeals)-XXIX, New Delhi dated 29.02.2010 for the Assessment Year 2006-07. The assessee, an individual, had filed the return of income for the Assessment Year 2006-07 declaring income of $23,100 on 03.11.2006.

Analysis and Decision:
The Tribunal noted that during the relevant period, the assessee had stayed in India for 135 days, which did not meet the requirement of 180 days for being a resident in India as per section 6(1)(a) and (c) read with Explanation (a) to section 6(1). Therefore, the status of the assessee was that of a non-resident. As the assessee had rendered services outside India and the income had accrued outside India, the income could only be taxed under the provisions of section 5(2)(a) of the Income-tax Act, 1961.

The Tribunal referred to a decision by the Hon'ble ITAT in the case of Ranjit Kumar Bose vs. ITO, where it was held that salary income accrued outside India but received in India could not be taxed on accrual basis under section 15. The Tribunal also cited the case of ADIT vs. Nandan Singh Chauhan, where it was established that merely instructing the salary to be transferred to an FCNR account in India does not bring the amount to taxation under the Indian Income Tax Act for an NRI.

Based on the facts of the case and the precedents cited, the Tribunal upheld the order of the CIT (A) and dismissed the revenue's appeal. Therefore, the appeal of the revenue stands dismissed, and the order was pronounced in open court on 28th June 2012.