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TMI Blog2024 (7) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be subject to verification by Ld. AO that this income has already been offered to tax in Singapore and the assessee has paid due taxes thereon. AO would also verify that no credit of Taxes paid in India has been taken by assessee in Singapore. As decided in Shri Kanagaraj Shanmugam [ 2022 (10) TMI 711 - ITAT CHENNAI ] regular salary accrued to any assessee is chargeable to tax in terms of Sec. 15(a). Even as per the provisions of Sec. 9(1)(ii), salary income could be deemed to accrue or arise in India only if it is earned in India in respect of services rendered in India. The bench, reading down Article-1 and Article-15 of India-Australia DTAA, held that Treaty benefit shall be applicable to persons who are residents of both India as well as Australia - contention of the revenue that the assessee being a non-resident and hence, treaty benefit cannot be extended to assessee, is incorrect. Accordingly, it was held by the bench that the salary so earned for work performed in Australia would be taxable in Australia. - HON BLE SHRI V. DURGA RAO, JM AND HON BLE SHRI MANOJ KUMAR AGGARWAL, AM For the Appellant : Shri B.V. Anil Kumar, (JCIT)-Ld.Sr. DR For the Respondent by : Shri S.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been offered to tax in Singapore and no credit of tax deducted at source in India has been taken by the assessee. Having heard rival submissions and after perusal of case records, our adjudication would be as under. Assessment Proceedings 4.1 During assessment proceedings, it transpired that the assessee was salaried employee with M/s. Master Card India Service Pvt Limited and was sent on Singapore on a long-term international assignment. During this period, the salary was paid by Indian employer and he remained on the payroll of its Indian Employer. The assessee received gross salary of Rs. 445.88 Lacs which was not offered to tax in India on the ground that no part of the services was rendered in India and the salary so received by him was already offered to tax in Singapore. However, Ld. AO maintained that the assessee did not shift its employer and was always on the payroll of Indian employer. The employer- employee relationship continued and the assessee was working at the direction of Indian employer only. Therefore, considering the provisions of Sec.15 r.w.s. 5(2), the salary would be taxable in India only and accordingly, Ld. AO show-caused the assessee. 4.2 The assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State unless the employment is exercised in the Other Contracting State. If the employment is so exercised, such remuneration as is derived therefore may be taxed in that Other State . 5.2 In order to claim the above treaty benefit, appellant needs to satisfy the following conditions as stipulated under section 90(2) and 90(4) which are reproduced below: Sec. 90(2) - Where the Central Government has entered into an agreement with the Government of any other country outside India or specified territory outside India as the case maybe, under sub-section (1) for granting relief of tax or as the case may be, avoidance of double taxation, then in relation to the assessee, to whom such agreement applies, the provisions of this Act shall apply to the extent they more beneficial to the assessee. Sec. 90(4) - An assessee, not being a resident, to whom an agreement referred in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless (a certification of his being a resident) in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory). 5.3 As the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. For remaining period, the work has been performed in UK though the salary has been received in India from existing employer. It is also a fact on record that this salary, for work performed in UK, has been offered to tax in UK which is evident from Tax Returns filed in UK. The assessee submit the as per Article 16(1) of DTAA, this income would be taxable in UK only. Alternatively, the assessee relies on the provisions of Sec.15 read with Sec.5(2) and Sec.9(1)(ii) which provides for taxability of salary on accrual basis and not on receipt basis. However, Ld. CIT(A) has held that the assessee would not be eligible for the benefit of DTAA since DTAA relief is to be given by resident country which is UK in the present case. 6. We find that an identical issue has been addressed by coordinate bench of Chennai Tribunal in Shri Paul Xavier Antonysamy V/s ITO (ITA No.2233/Chny/2018 dated 28.02.2020). In this decision, the bench has held that the provisions of Sec.5(2) are subjected to other provisions of the Act. The regular salary accrued to any assessee is chargeable to tax in terms of Sec.15(a). Even as per the provisions of Sec.9(1)(ii), salary income could be deemed to accrue or ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Residency Certificate (Page nos. 192-193 of paper book). As per this certificate, the assessee has claimed relief for foreign earning not taxable in UK for 7952. The same shall be considered by Ld. AO while computing the quantum of income taxable in India as directed by us in preceding para-7. 9. The appeal stands partly allowed in terms of our above order. In the above decision, we have held that salary income as accrued to the assessee for work performed in a foreign jurisdiction would not be taxable in India whereas the salary received for work performed in India would be taxable in India. The benefit of DTAA would be available to the assessee as per the decision of coordinate bench of Chennai Tribunal in Shri Paul Xavier Antonysamy V/s ITO (ITA No.2233/Chny/2018 dated 28.02.2020) wherein it was held by the bench that the provisions of Sec. 5(2) are subjected to other provisions of the Act. The regular salary accrued to any assessee is chargeable to tax in terms of Sec. 15(a). Even as per the provisions of Sec. 9(1)(ii), salary income could be deemed to accrue or arise in India only if it is earned in India in respect of services rendered in India. The bench, reading down A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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