2010 (11) TMI 803

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..... within the taxable income and demand was raised accordingly by assessment order - Held that:- Assessee was working outside India for a period of 225 days and the income in question earned by assessee has not accrued in India and is not deemed to have accrued in India, appeal is dismissed as devoid of merits. In favour of assssee.
Manjula Chellur, Aravind Kumar, JJ. Aravind for M.V. Sheshachala for the Appellant A. Shankar and M. Lava for the Respondent JUDGEMENT Aravind Kumar, J:- 1. This is Revenue's appeal questioning the correctness and legality of the order passed by the Tribunal in ITA No. 1137/Bang/2008, dt. 26th June, 2009. 2. Assessee is an individual and for the asst. yr. 2005-06 return of income was filed under the s .....

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..... . 1137/Bang/2008. The Tribunal considered the plea put forward by the Revenue with regard to s. 5(2)(a) of the IT Act, 1961 and on considering the rival contentions held that 'salary income' taxable on accrual basis as per s. 15 and the salary that has been paid to the assessee is on account of the work discharged by the assessee outside India and it was not a salary paid to the assessee for the work carried on in India and as such the amount of salary that has been transferred to the bank account of the assessee cannot be considered or brought within the definition of "salary" as defined either under s. 5 or within scope of total income as defined under s. 15 of the Act on accrual basis and accordingly rejected the contentions of the Reven .....

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..... n the said case it has also been held that the salary which is earned in India will alone be regarded as income arising in India and not otherwise. The principle laid down in the said case is squarely applicable to the facts of present case also. (c) The criteria of applying the definition of s. 5(2)(b) would be such income which is earned in India for the services rendered in India and not otherwise. (d) Under s. 15 of the Act even on accrual basis salary income is taxable i.e., it becomes taxable irrespective of the fact whether it is actually received or not; only when services are rendered in India it becomes taxable by implication. However, if services are rendered outside India such income would not be taxable in India. 7. The E .....

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