Salary earned for services rendered abroad by non resident not taxable in India treating it as accrued or arisen in India only because it was received in India
ABCAUS Case Law Citation:
ABCAUS 2962 (2019) (05) ITAT
Important Case Laws Cited/relied upon by the parties:
Utanka Roy vs. DIT
The assessee’s only grievance raised in the instant appeal was the action of both the lower authorities’ in treating his salary income derived in lieu of services rendered in USA to be taxable in India u/s 5(2) of the Income Tax Act, 1961 (the Act).
The Tribunal observed that there was no dispute between the parties about the assessee having derived the impugned salary income by rendering services in United States of America. His paper book on record duly supported the same comprising of statement of facts, details of impugned salary, the employer, its said salary income having been subjected to social security tax, Medicare tax, scrutiny proceedings etc.,
The Tribunal noted that the Revenue’s sole argument was that the assessee had received the impugned income in India and therefore, the same had rightly been assessed in India under the provision of the Act.
The Tribunal opined that there was no merit in Revenue’s instant argument as the Hon’ble jurisdictional High Court’s decision held that salary income derived from services rendered abroad cannot be held to have been accrued or arisen in India so as to exigible to assessment under the provision of the Act.
The Tribunal noted that their lordship had held that the question whether the petitioner had rendered services in India or not was a question of fact. When it was not disputed that the petitioner as a marine engineer had rendered services outside India for the period of 286 days, received his remuneration for such work from a foreign company, the Hon’ble High Court held that consequently, the income received by the petitioner for services rendered outside India had to be considered as income received out of India and treated as such.
Adopting the detailed reasoning of the Hon’ble High Court the Tribunal deleted the impugned addition