Non-resident wins tax case: Salary earned abroad, received in India, not taxable.

The tribunal ruled in favor of the non-resident individual, holding that the salary received in the Indian bank account for services rendered outside India is not taxable under the Income Tax Act. The tribunal relied on the principle that income is taxed where the assessee exercises control over the money, referencing a Supreme Court decision. Additionally, the tribunal followed a precedent set by the ITAT Kolkata, determining that salary income accrued outside India but received in India is not chargeable to tax under section 15(a) of the Income Tax Act.

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Issues involved:
The issue revolves around whether the salary received in a bank account maintained in India by a non-resident individual, for services rendered outside India, is taxable under section 5(2) of the Income Tax Act, 1961.

Summary:

Issue 1: Taxability of salary received in Indian bank account by non-resident individual
The appellant, a non-resident individual employed by a foreign company, received salary in his Indian bank account for services rendered outside India. The Assessing Officer added this amount to the appellant's taxable income under section 5(2) of the IT Act. However, the Ld. Commissioner of Income Tax (Appeals) held that the income cannot be taxed under section 5(2) as the salary was received in the appellant's FCNR account in India, following the principle that income is treated at the place where the assessee gets the money under his control. The Ld. Commissioner referred to a Supreme Court decision to support this reasoning.

Issue 2: Applicability of tribunal's decision
The appellant relied on a decision of the ITAT, Kolkata 'C' Bench in a similar case involving an NRI receiving salary in India for services rendered outside India. The tribunal in that case concluded that salary income received in India, but accrued outside India, should be excluded from the total income of the assessee. The tribunal held that such salary income is not chargeable to tax under section 15(a) of the Income Tax Act. The current tribunal upheld this precedent and decided the issue in favor of the assessee, dismissing the appeal filed by the revenue.

In conclusion, the tribunal ruled in favor of the non-resident individual, holding that the salary received in the Indian bank account for services rendered outside India is not taxable under the Income Tax Act, based on established legal principles and precedents.

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