9911796707
TMI Blog2024 (3) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant commissioner of Income tax, DCIT/ACIT - Int Tax, Gurgaon ("Ld. AO") in pursuant to directions of Learned Dispute Resolution Panel ("Ld. DRP") is wrong and bad in law and liable to be quashed. 2. That on the facts and circumstances of the case & in law, the Ld. DRP/AO has erred in making an addition of INR 1,66,92,600/- to salary income for the year under consideration ignoring the provisions of section 15 read with section 5(2) and section 9(1)(ii) of the Act, and without appreciating that the appellant is non-resident and such income earned in rendering services outside India. 3. That on the facts and circumstances of the case & in law, the Ld. DRP/ AO has erred in failing to appreciate the applicability of Article 15 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the Indian company to a non-resident is examined with reference to the provisions of Section 5, Section 9, Section 15 of the Income Tax Act, 1961. Section 5 Income Tax Act reads as under: "Scope of total income. 5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or (c) accrues or arises to him outside India during such year : Provided that, in the case of a person not ordinarily resident in India within the meaning of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian company as per the provisions of section 9 of the Income Tax Act. Section 9 Income Tax Act reads as under: "Income deemed to accrue or arise in India. 9.(1) The following incomes shall be deemed to accrue or arise in India :- 27(i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India. Explanation 1.-For the purposes of this clause- (a) in the case of a business, other than the business having business connection in India on account of significant economic presence, of which all the operations are not carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial zone notified by the Central Government in the Official Gazette in this behalf. ...................... ...................... (ii) income which falls under the head "Salaries", if it is earned in India. Explanation.-For the removal of doubts, it is hereby declared that the income of the nature referred to in this clause payable for- (a) service rendered in India; and (b) the rest period or leave period which is preceded and succeeded by services rendered in India and forms part of the service contract of employment, shall be regarded as income earned in India ; (iii) income chargeable under the head "Salaries" payable by the Government to a citizen of India for service outside India ; 7. As per the provision of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the firm shall not be regarded as "salary" for the purposes of this section." 9. As per the definition the salary paid or the advances received are to be included in the total income of the person when the salary becomes due. 10. From the concurrent reading of Section 5 dealing with scope of total income, Section 15 dealing with computation of total income under the head salary and chargeability thereof and Section 9 dealing with income arising or accruing in India with reference to the salaries and the services rendered in India, we hold that no taxability arises on the salary/allowances received by the assessee since the assessee is a non-resident and has rendered services outside India. 11. In the result, the appeals of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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