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TMI Blog2024 (8) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of the appellant from India, delay as caused. We have perused the condonation petition and find that the sole ground taken by the appellant is that he was not present in India at the time of the issuance of the impugned order and it is a fact that appellant was an employee of IBM India Pvt. Ltd. In a catena of decisions, Hon'ble Supreme Court has held that in every case there is a delay, can be some laps on the part of the litigant concerned. That alone is not enough to turn down his plea and shut the door against him. In the present case we find that explanation submitted by the appellant do not reflect any mala fide intention of the appellant. Hence, keeping in view the decision of the Hon'ble Apex Court that the case should be decided on merit and not on technical basis. Accordingly, the delay is hereby condoned and the appeal is admitted for adjudication. 2. The brief facts of the case of the appellant are that the appellant Mr. Santanu Sanyal filed his return of income online for the AY 2016-17 declaring taxable income at Rs. 2,55,640/- after claiming a deduction of INR 2,19,372/- under Chapter VI-A of the Act. It is also the case of the appellant that he cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds services rendered outside India to taxable income under the Act. 4. That the Impugned Order of Ld. CIT(A) upholding inclusion of foreign assignment allowance amounting to Rs. 48,39,078/-received towards services rendered outside India by nonresident individual, in taxable income under the Act is contrary to provisions of law 5. That the Impugned Order erred in misinterpreting provisions of law to conclude the employment contract is in India and in ignoring that services are undisputedly rendered outside India and hence not taxable under the Act. 6. That Ld. CIT(A) erred in upholding unjust and arbitrary assessment under Section 144 on irrelevant considerations. 7. That Ld. CIT(A) erred in not deleting arbitrary determination of income by Ld. AO purportedly under Section 144, failing to appreciate that even best judgement cannot be arbitrary or capricious. 8. That the Ld. AO erred on facts and in law in disallowing exemption under Section 10(38) on long terms capital gains of Rs. 2,30,238/- from of sale of equity share and equity-oriented fund, while giving effect to the Impugned Order. 9. That the Ld. AO erred on facts and in law in not granting exemption under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prasanth Reddy vs Income Tax Officer (International Taxation) [2023] 153 taxmann.com 281 (Hyderabad -Tribunal) i) Durga Prasad Sana vs Income Tax Officer (International Taxation) [20231 154 taxmann.com 532 (Hyderabad -Tribunal) j) Ajay Kumar Singh Gaur vs Income Tax Officer - 2(2), Agra [2021] 127 taxmann.com 630 (Agra- Tribunal) k) Arvind Singh Chauhan vs Income Tax Officer, Ward 1(2), Gwalior [2014] 42 taxmann.com 285 (Agra - Tribunal) l) Sreenivasa Reddy Cheemalamarri vs Income Tax Officer, International Taxation - 1, Hyderabad ITANo. 1463/Hyd./2018 m) Serco BPO v Authority of Advance Rulings, New Delhi [2015] 379 ITR 256 (Punjab and Haryana) n) Skaps Industries India (P.) Ltd v Income Tax Officer, International Taxation, Ahmedabad [2018] 171 ITD 723 (Ahmedabad) 2.3. Ld. Counsel for the assessee further challenges with respect to the disallowance of deduction claimed under Chapter VI-A of India-UK DTAA amounting to INR 2,19,372/- and he submitted that he made the investment as an employee's provident fund, contribution towards public provident fund, medical premium, contribution made to National Pension Scheme etc. He has further submitted that the appellant has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dences if required. The ground is statistically allowed subject to the above verification." 4.2. So far, the interest and penalty are concerned it has been observed that since the ground is consequential in nature and disposed with the direction to the AO that interest u/s 234A, 234B, 234D of the Act are consequential and mandatory and therefore, the correct computation of interest may be calculated as per law at the time of giving effect to this order. So, before us we have to decide only ground nos. 2-5 as these were dismissed by the ld. CIT(A). The grounds are regarding the assessing of income of the appellant amounting to INR 1,15,28,610/- and adding the foreign allowances to the total income of the appellant which was received outside India for services rendered in United Kingdom amounting to INR 48,39,078/-. Adding the value of stock amounting to INR 1,59,053/- and further disallowing the exemption claimed by the appellant under Article 16(1) of the India-UK DTAA amounting to INR 57,93,857/- for the AY 2016-17. In this context we have perused the documents filed by the assessee which are as follows: a) Copy of Return of Income along with acknowledgement and computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es rendered in United Kingdom. Hence we are in this view that the foreign allowance of INR 48,39,078 does not fall within the scope of total income under section 5(2) of the Act. We further find that the foreign assignment allowance was paid by IBM India to the International Travel Card outside India. The said card is denominated in foreign currency only and can be used only outside India. Once an employee is sent on foreign assignment, a travel currency card is issued to the employee by Axis Bank Limited. In this regard, appellant has submitted before us the detailed mechanism of credit to Travel which is as follows- When an employee of IBM is sent on international assignment, Axis Bank upon instruction from IBM issues an Axis travel currency card to an employee who is sent to a foreign assignment. IBM maintains an Exchange Earner Foreign Currency ('EEFC') Account with Deutsche Bank, Bangalore. From the EEFC Account of Deutsche bank, funds are transferred to the foreign banks outside India with whom Axis Bank maintains the Nostro Account (i.e., Zuercher Kantonal Bank, Zurich; JP Morgan Chase Bank, New York, etc). Upon instruction from IBM the funds are transferred from the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat "Salary chargeable to tax on the basis irrespective of the fact whether it is received in India and therefore, for a non-resident where services are rendered outside India the same is approved outside India and hence, not taxable in India irrespective of the place of the resident." 5. Going over the documents as well as the submissions of the assessee, we are of this opinion that addition of INR 48,39,078/- the taxable income of the appellant as made by the AO confirmed by the ld. CIT(A) is unjustified and accordingly, the same is deleted. So far as the other grounds are concerned, it appears to us that appellant had received stock option prerequisites amounting to INR 1,76,123/- during the previous AY 2015-16, further an amount of INR 1,59,053/- represents the value of stock option prerequisites accrued to the appellant for the services rendered outside India from the date of grant to the date of vesting and hence, the same does not form part of the scope of the total income of the non-resident and accordingly it is not taxable in India. Further submission of ld. Counsel for the assessee with respect to the disallowance of exemption claimed by the appellant in this context, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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