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TMI Blog2014 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... the question as to income is to be treated as having been received in India - The connotation of an income having been received and an amount having being received are qualitatively different - The salary amount is received in India but the salary income is received outside India - It is elementary that an income cannot be taxed more than once but if, at each point of receipt, the income is to be taxed, it may have to be taxed on multiple occasions – thus, in a situation in which the salary has accrued outside India, thereafter, by an arrangement, salary is remitted to India and made available to the employee, it will not constitute receipt of salary in India by the assessee so as to trigger taxability under section 5(2)(a) of the Act – thus, the addition made is liable to be set aside – Decided in favour of Assessee. Addition on account of bank interest - Whether the authorities below have erred in making and upholding the addition on account of bank interest earned and credited in NRE account – Held that:- The HSBC has categorically indicated that the account is an NRE account - When this was pointed out to the Revenue, he did not have much to say except for placing his rathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come accruing or arising in India, income deemed to accrue or arise in India, or income received or is deemed to be received in India. Since the salary income in respect of ship crew is accruing and arising outside India, it is outside the ambit of limited scope of Section 5(2). As for salary income being credited to bank account in India, assessee's contention was that salary income deposited in bank account in India, directly from bank account of the company outside India was not taxable in India. Reliance was placed on judicial precedents in the cases of DIT Vs. Prahlad Vijendra Rao (51 DTR 95) , DIT vs. Diglan George Smith [(2011) 40 (I) ITCL 419)] and ITO vs Lohithakshan Nambian (ITA No. 1045/ Bang/ 09; order dated 12.04.2010). None of these submissions, however, impressed the A.O. The Assessing Officer was of the view that the assessee's explanation cannot be accepted because section 6(5) provides that where a person's status is resident for one of the sources of his income, his status for all the sources of income is to be taken as resident, and because assessee's status for pension and interest, by his own admission, is that of 'resident' - an inference based on assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable in India . Accordingly, I am of the considered opinion that since the salary was accrued and received in India hence, the Assessing Officer has correctly assessed the salary income in the hands of the appellant. Therefore , the addition of Rs.13,34,884 is hereby confirmed. 4. The assessee is not satisfied by the stand so taken by the CIT(A) and is in further appeal before us. 5. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal positions. 6. We find that the Assessing Officer has himself taken note of the number of days of his stay outside India, as per passport entries, and given a categorical finding that the assessee's residential status, under section 6, is of 'non -resident'. Yet, he has proceeded to treat the assessee as 'resident' for all purposes on the basis of reasoning that once assessee has a residential status of 'resident' for the purpose of bank interest and pension income, and in view of operation of Sect ion 6(5), the assessee is required to be treated as 'resident' for the purposes of all sources of his income. However, the reasoning so adopted by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urces of income, e.g. calendar year for business income and financial year for income form salaries, and, therefore, it was possible to have different residential status for different sources of income, because the number of days of presence in India was to be seen vis- -vis the relevant previous years and those previous years, in some cases, could cover different period - even as assessment years for all those previous years remained the same. With the uniformity of previous years, such a situation is no longer possible, and, the legal provision incapable of any application. If this legal provision still exists on the statute, it can only be explained by inertia of the law makers in weeding out redundant legal provisions. 8. Once it is not in dispute that the assessee qualifies to be treated as a 'non-resident' under Section 6 of the Act, as is the undisputed position in this case, the scope of taxable income in the hands of the assessee, under Section 5(2), is restricted to (a) income received or is deemed to be received in India, by or on behalf of such person; and (b) income which accrues or arises, or is deemed to accrue or arise to him, in India. Therefore, it is only when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... happens subsequently once the income, in its character as such is received by the assessee or his agent; an income cannot be received twice or on multiple occasions. As the bank statement of the assessee clearly reveals these are US dollar denominated receipts from the foreign employer and credited to non- resident external account maintained by the assessee with HSBC Mumbai. The assessee was in lawful right to receive these monies, as an employee, at the place of employment, i.e. at thelocation of its foreign employer, and it is a matter of convenience that the monies were thereafter transferred to India. These monies were at the disposal of the assessee outside India, and, it was in exercise of his rights to so dispose of the money, that monies were transferred to India. We may, in this regard, refer to Hon'ble Madras High Court's judgment in the case of CIT Vs AP Kalyankrishnan (195 ITR 534) wherein Their Lordships were in seisin of a situation in which the assessee had received pension from Malaysian Government which was remitted by the Accountant General, Federation of Malaya, Kuala Lumpur to Accountant General, Madras, for onward payment to the assessee. On these facts, rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. During the course of the assessment proceedings, the Assessing Officer noticed that total amount of Rs 40,589 has been credited to the assessee's bank account with HSBC but the assessee has not included the same in his taxable income. On this basis, the Assessing Officer added the said amount to the income returned by the assessee. Aggrieved by the addition so made, assessee carried the matter in appeal before the CIT(A) but without any success.Even though it was pointe d out to the learned CIT(A) that the account, in which the interest of Rs 40,589 was credited, was an NRE (Non -resident- External) account, and such, interest earned thereon was exempt under section 10(4)(ii) of the Act, learned CIT(A) held that since the said account was not an NRE account, and, accordingly, exemption under section 10(4)(ii) was not available. The assessee is not satisfied with the stand so taken by the learned CIT(A) and is in appeal before us. 14. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 15. On a perusal of bank statements, we find that the HSBC has categorically indicated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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