9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 1067 - AT - Income TaxIncome Taxable in India - Income deemed to accrue or arise in India - salary/allowances received in lieu of services performed outside India - assessee is employee of M/s IBM India Pvt. Ltd. as worked outside India and received the impugned sum as salary/allowances in lieu thereof - Whether assessee non-resident s salary/allowances for services performed outside India is taxable in India? - HELD THAT - We find that the instant issue is no more res integra as per DIT (International Taxation) vs. Prahlad Vijendra Rao 2010 (11) TMI 803 - KARNATAKA HIGH COURT ; Utanka Roy 2016 (12) TMI 876 - CALCUTTA HIGH COURT and Arvind Singh Chauhan 2014 (3) TMI 18 - ITAT AGRA already having decided it in taxpayer s favour and against the department thereby holding that such salary/allowance(s) which are received in lieu of services performed outside India are not taxable in India by virtue of sec.5(2) of the Act merely because an assessee is permanent resident of India. We adopt the very reasoning mutatis mutandis and direct the Assessing Officer to delete the impugned addition. Decided in favour of assessee.
Issues:
1. Taxability of salary/allowances received in lieu of services performed outside India by a non-resident in India. Analysis: The judgment pertains to an appeal for the assessment year 2014-15 involving proceedings under section 143(3) of the Income Tax Act, 1961. The primary issue in this case is the taxability of an assessee's salary/allowances received in lieu of services performed outside India in India. The appellant challenged the lower authorities' decision to tax the sum of Rs. 30,46,223 received for services performed outside India as taxable in India. The lower authorities had assessed the assessee as a non-resident but held that the salary/allowances for services performed outside India were taxable in India. The CIT(A) considered the material on record and noted that the foreign allowances did not accrue or arise in India and were received outside India through a travel card. However, the Assessing Officer (AO) raised concerns about the lack of proof regarding the actual receipt of foreign allowances outside India. The appellant provided a certificate from the employer confirming that the allowances were received outside India, but the necessary documents to substantiate this claim were not provided. Additionally, the appellant mentioned that taxes on the foreign allowances were paid in the Netherlands, but this alone did not establish that the allowances were received outside India. The CIT(A) relied on Section 5(2)(a) of the Income Tax Act, which imposes tax based on receipt in India for non-residents. In its decision, the Appellate Tribunal referred to previous judgments that held that salary/allowances received in lieu of services performed outside India are not taxable in India under Section 5(2) of the Act, even if the assessee is a permanent resident of India. Citing precedents, the Tribunal directed the Assessing Officer to delete the addition made to the assessee's income, thereby allowing the appeal in favor of the assessee. In conclusion, the judgment clarifies the tax treatment of salary/allowances received for services performed outside India by a non-resident in India. It emphasizes the importance of establishing the actual receipt of foreign allowances outside India to determine tax liability, and it upholds the principle that such income is not taxable in India under certain circumstances, as supported by legal precedents.
|
