Tribunal rules non-resident status exempts foreign income. Importance of residential status in taxability.

The Tribunal allowed the appeal, directing the Assessing Officer to delete the addition of salary income earned in Korea by an individual due to the non-resident status established by staying outside India for more than 182 days. The case emphasized the significance of residential status in determining the taxability of foreign income and cited relevant provisions and case laws to support its decision.

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Issues involved:
1. Taxability of salary received outside India by an individual.
2. Determination of residential status for tax purposes.
3. Applicability of relief under section 90 of the Income Tax Act.

Issue 1: Taxability of salary received outside India by an individual:
The case involved an individual who received salary outside India (Korea) but did not declare it in the return of income. The Assessing Officer added the salary income earned in Korea to the total income of the assessee. The CIT (A) upheld this addition, stating that the appellant did not claim non-resident status during the assessment proceedings and failed to provide sufficient evidence to substantiate the claim. The Tribunal, however, considered various precedents and held that when an individual stays outside India for 182 days or more, the income received from services rendered outside India cannot be taxed in India, even if TDS is deducted on such income. Citing relevant case laws, the Tribunal directed the Assessing Officer to delete the addition of the salary income earned in Korea.

Issue 2: Determination of residential status for tax purposes:
The Assessing Officer and CIT (A) considered the appellant as a resident of India for the relevant assessment year based on the information provided in the return of income and lack of evidence supporting non-resident status. However, the Tribunal held that the appellant, who stayed outside India for more than 182 days, should be considered a non-resident for tax purposes. The Tribunal emphasized that the residential status is crucial in determining the taxability of income earned outside India and cited relevant case laws to support its decision.

Issue 3: Applicability of relief under section 90 of the Income Tax Act:
The appellant did not claim relief under section 90 of the Income Tax Act, which allows for relief from double taxation for income earned in a foreign country. The Assessing Officer and CIT (A) did not consider this relief due to the lack of evidence supporting non-resident status. However, the Tribunal, after determining the non-resident status of the appellant, directed the Assessing Officer to delete the addition of the salary income earned in Korea, thereby implying the applicability of relief under section 90 in this case.

In conclusion, the Tribunal allowed the appeal filed by the assessee, directing the Assessing Officer to delete the addition of the salary income earned in Korea due to the appellant's non-resident status and the taxability of income earned outside India. The case highlights the importance of establishing residential status and considering relevant provisions and case laws in determining the taxability of foreign income.

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