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TMI Blog2021 (4) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... milar issue held evidence was not produced for receiving the foreign allowance outside India and the bank account of the assessee maintained abroad was not produced is not relevant because the facts of the case establish es that the salary and the foreign allowance was received in India for the services rendered abroad and by virtue of DTAA and the Act, there is no bar in law for receiving the money in India. For the above-mentioned reasons, hereby direct the Ld.AO to delete the tax imposed on the assessee with respect to his salary income of ₹ 12,90,846/- and the foreign allowances Thus , the appeal of the assessee is allowed. The Assessing Officer is directed to allow exemption under DTAA. - ITA No 86./Hyd/2021 - - - Dated:- 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside India with respect to the services rendered outside India, b) Copy of the Assignment letter between the Employer and employee. 2.1 In response, the assessee submitted a reply dated 9.9.2016 given as under: As the assessee has spent less than 60 days in India during the FY 201314, he qualifies as a Non-resident under section 6(1) of the Act. Therefore, the foreign allowance of ₹ 20,72,238/- was not offered to tax in India in the return of income as the same was received by him outside India for the services rendered outside India and shall not form part of total income under section 5(2) of the Income tax Act, 1961. 2.2 The Assessing Officer, however, held that the claim of the assessee could not be allowed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a person who was a non-resident included all income from whatever sources derived, which was received or deemed to be received in India in such year by or on behalf of such person or accrue or arises to him in India during such year. Hence the total salary income and allowance received by employee is taxable. V. Further, the assessee has stated which is reproduced as under: Hence at the time of payment of salary, as the residential status of the assessee was unknown to his employer, IBM has treated the entire salary paid to assessee as taxable in India and taxes were deducted at source on the entire salary . As the Act has put primary responsibility and onus on the deductor employer to deduct taxes, IBM with abundant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly brought to tax. VI. With respect to the non-submission of TRC, the A.R of the assessee himself stated that he cannot produce the TRC even till 31 December, 2016 i.e. the last day for the time barring assessments. Therefore, in absence of tax residency certificate, the assessee s claim for Double taxation Avoidance agreement could not be considered. 2.3 The learned Counsel for the assessee while reiterating the submissions made before the authorities below have submitted that the same issue had arisen in the case of similar employees of IBM Ltd before the Tribunal and the Tribunal has granted relief to the assessee in support there several orders of the decisions of the Coordinate Bench of the Tribunal are placed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, by virtue of the Treaty, the assessee is liable to tax in Austria for the services rendered in Austria and not in India. Therefore, though the Act mandates Tax Residency Certificate of Austria , non-production of the same before the Ld. Revenue Authorities shall not enable the Ld. Revenue Authorities not to grant the benefit of the Treaty to the assessee. Therefore, the Ld. Revenue Authorities have erred in not granting the benefit of the Treaty to the assessee just for the reason that the assessee has not submitted the Tax Residency Certificate from Austria. The Ahmedabad Bench of the Tribunal in the case of Skaps Industries India (P.) Ltd vs. ITO, International Taxation, Ahmedabad reported in 171 ITD 723 taking cue from the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions are required to be satisfied to claim exemption under Article 15(1) of the India -Austria DTAA: - The person should be a resident of Austria and - The salary and other remuneration should be earned in respect of employment exercised in Austria. 14. From the facts of the case it is apparent that during the previous relevant to AY 2014-15, the assessee qualifies as a non-resident in India and as a tax resident in Austria. The salary and allowances are earned by the assessee in respect of employment rendered in Austria due to his foreign assignment. Hence, the first two conditions enumerated under Article 15(1) of the India-Austria DTAA stands satisfied. Therefore, the assessee 's claim of exemption in regard to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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