9911796707
TMI Blog2021 (6) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 009 wherein salary amounting to Rs. 19,25,067/- has been credited being salary from foreign enterprises i.e., ANGLO Eastern Ship Management Ltd., 23RD Floor, CEF Life Tower, 248, Queen's Road East, Wanchai, Hong Kong. On being questioned by the AO, it was submitted that the assessee has NRI status during the period under consideration and, during the year, the assessee had stayed outside India for more than 187 days and, therefore, is not liable to tax on the salary income earned abroad from a foreign employer. However, the AO was not satisfied with the arguments advanced by the assessee. He referred to the provisions of section 6 of the IT Act and held that the assessee was resident in India and salary income earned by him was taxable in India. He also referred to the definition of non-resident u/s 2(30) of the IT Act and noted that the assessee had spent more than 60 days in India and fulfilled the conditions envisaged under Clause (c) of section 6(1) of the IT Act, 1961. He rejected the explanation of the assessee that his income was not taxable in India by virtue of clause (a) of section 6(1). Rejecting the various explanations, the AO made addition of Rs. 19,25,067/- under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year by or on behalf of such person or accrues or arises or is deemed to accrue or arise to him in India during such year or accrues or arises to him outside India during such year, his such income is includible in the total income. In view of the above, it is clear that the Appellant's income even if not accrued or arisen in India would be taxable in India by virtue of clause (c) of section 5(1) of the IT Act. Though the fact is that the Appellant's income has been credited to an Indian branch of HDFC Bank. The other question to be decided in this case is whether the Assessee was resident in India or not for bringing the salary income earned from a foreign entity during the year under consideration. To be a resident in India either of the conditions given below are to be satisfied : "6. For the purposes of this Act, - (1)An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or (b).... (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll it shall be added u/s 6(l)(a) of Act and defeated the binding decisions of superior authorities. 6. That, Id. CIT(A), erred in sustaining addition of Rs. 1,75,000/-, even after admitting such payment by wife and addition is against all the cannons of law." 5. The ld. counsel for the assessee strongly challenged the order of the CIT(A) upholding the validity of reassessment proceedings as well as the addition on merit. So far as the validity of the reassessment is concerned, the ld. Counsel submitted that the case of the assessee was reopened for verification of purchase of immovable property amounting to Rs. 49,97,152/-. However, no such addition has been made on account of reasons for which the case was reopened. Relying on various decisions, he submitted that where there is no addition on the basis of reasons recorded, the AO loses jurisdiction to assess income under other heads or under other issue. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT 12 taxman.com 74, the decision of the Hon'ble Delhi High Court in the case of Tikaula Sugar Mills Ltd. vs. DCIT, ITA No.86/2006, order dated 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld by the CIT(A) is not justified. 7.1 So far as 50% stamp duty sustained by the CIT(A) is concerned, he submitted that the assessee had enough withdrawals to meet the stamp duty expenses amounting to Rs. 1,75,000/- and, therefore, the CIT(A) was not justified in sustaining the addition. 8. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). So far as the validity of reassessment proceedings are concerned, he submitted that although the case was reopened for purchase of immovable property amounting to Rs. 49,97,152/-, however, it is a fact that the AO has made addition of Rs. 3,50,000/- on account of stamp duty for purchase of the property. Therefore, the argument of the ld. Counsel that the addition has not been made on account of the reasons for which the case was reopened and, therefore, the AO cannot make any other addition is without any basis and misplaced and cannot be accepted. The ld. CIT(A) has given justifiable reasons while upholding the validity of the reassessment proceedings. So far as the merit of the case is concerned, the ld. DR heavily relied on the order of the CIT(A). 9. I have considered the rival arguments made by both the sides, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccrued outside India. The assessee had stayed outside India for a period of more than 187 days, a fact brought on record by the AO and not controverted by the ld. DR. Under these circumstances, it has to be seen as to whether such salary income is liable to be taxed in India where the assessee was outside India for a period of more than 182 days and became a non-resident and the salary income was received outside India from a foreign employer for services rendered outside India. 11. I find, identical issue had come up before the coordinate Benches of the Tribunal in the case of Avdesh Kumar (supra). In that case, the AO, during the course of assessment proceedings had observed from the bank extract furnished by the assessee that it had received salary outside India (Korea) which had not been declared in the return of income and the assessee had also not claimed any relief u/s 90. The amount of such salary in Korean currency was converted into Indian currency. Keeping in view of 26AS wherein it was found that employer had deducted TDS on the entire income i.e., salary received in India as well as in Korea, the AO added back the salary income earned in Korea as income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade 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. 5. We have heard both the sides on this issue. After hearing, we find that during the relevant period, the assessee has stayed in India for 135 days. As per the provisions of section 6(1 )(a) and (c) read with Explanation (a) to section 6(1), the period of stay of an individual should be 180 days for being a resident in India. Thus, the status of the assessee was a nonresident. In view of this fact, the income can be taxed only with the provisions of section 5(2)(a) of the Income-tax Act, 1961. The assessee has rendered services outside India and the income has accrued outside India. The only issue is that whether the amount credited in the NRI account of the assessee located in India as per his instructions to the employer can be taxed as per provisions of section 5(1 )(a) and (b) of the Income-tax Act, 1961 with regard to scope of income. We have considered all the facts of the case and we find that this issue is covered in favour of the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered outside India, therefore, respectfully following the decision cited supra, I set aside the order of the CIT(A) and direct the AO to delete the addition. 13. So far as the addition of Rs. 1,75,000/- sustained by the CIT(A) on account of stamp duty is concerned, I find the same also is liable to be deleted under the facts and circumstances of the case. Admittedly, the AO has not made any addition on account of purchase of immovable property amounting to Rs. 49,97,152/- meaning thereby he has accepted the source of that huge amount. So far as the amount of Rs. 3,50,000/- towards the stamp duty is concerned, a perusal of the assessment order shows that the amount was paid by Mrs. Vandana Bhardwaj as per the ledger account of M/s Landcraft Developers Pvt. Ltd. which was reproduced by the AO in the body of the assessment order. Therefore, when the money was paid by Mrs. Vandana Bhardwaj, there was no reason for making the addition in the hands of the assessee. The ld. CIT(A) had not given any cogent reason as to why 50% shall be added in the hands of the assessee when the payment was admittedly made by Mrs. Vandana Bhardwaj, a fact brought on record by the AO himself. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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