Non-resident salary taxability under the India-UK treaty and house property loss claims were sent back for fresh verification.

A non-resident assessee's foreign salary and allowances for services rendered in the United Kingdom raised the question of Indian taxability and treaty relief under Article 16(1) of the India-United Kingdom DTAA. As the disputed allowances were supported by additional material not examined below, and the factual basis for receipt and treaty entitlement required verification, the matter was restored to the Assessing Officer for fresh adjudication after hearing the assessee. The claim for loss from house property was also left open because it required verification of whether it had been made in the original return and whether it could be considered on the record. Both issues were remanded for examination in accordance with law and were treated as allowed for statistical purposes.

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Issues: (i) Whether the foreign salary and allowances received by a non-resident assessee for services rendered in the United Kingdom were taxable in India and whether relief under Article 16(1) of the India-United Kingdom Double Taxation Avoidance Agreement was available. (ii) Whether the claim for loss from house property required verification and adjudication.

Issue (i): Whether the foreign salary and allowances received by a non-resident assessee for services rendered in the United Kingdom were taxable in India and whether relief under Article 16(1) of the India-United Kingdom Double Taxation Avoidance Agreement was available.

Analysis: The assessee was treated as a non-resident, and the disputed foreign allowances were supported before the Tribunal by additional material that had not been produced before the authorities below. The dispute turned on the place of receipt of the allowances and the applicability of the treaty benefit. Since the additional evidence required verification and the factual foundation had not been examined at the lower stages, the existing finding on taxability was not finally affirmed on merits.

Conclusion: The issue was restored to the Assessing Officer for fresh verification and decision in accordance with law, after giving the assessee an opportunity of being heard. The issue was thus decided in favour of the assessee for statistical purposes.

Issue (ii): Whether the claim for loss from house property required verification and adjudication.

Analysis: The claim was stated to require examination as to whether it had been made in the original return and whether it could be considered on the available record. The matter therefore required factual verification by the Assessing Officer rather than outright rejection.

Conclusion: The matter was directed to be verified and adjudicated afresh by the Assessing Officer in accordance with law. This issue was also decided in favour of the assessee for statistical purposes.

Final Conclusion: The additions and disallowances in dispute were not finally sustained on merits, and the matter was sent back for fresh examination of the factual claims, leaving the controversy open at the assessment stage.

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