Tribunal validates reassessment, orders deletion of foreign salary income & stamp duty addition

The Tribunal upheld the validity of the reassessment proceedings but directed the deletion of the addition related to the salary income earned abroad and the stamp duty payment. The decision was pronounced on 14.06.2021.

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Issues Involved:
1. Validity of Reassessment Proceedings
2. Taxability of Salary Income Earned Abroad
3. Addition on Account of Stamp Duty Payment

Issue-wise Detailed Analysis:

1. Validity of Reassessment Proceedings:
The assessee challenged the validity of the reassessment proceedings initiated by the Assessing Officer (AO) under section 147 of the Income Tax Act (IT Act). The AO reopened the assessment based on information that the assessee had purchased an immovable property amounting to Rs. 49,97,152/- during the financial year 2010-11. The AO issued a notice under section 148 on 31.03.2018. The assessee argued that since no addition was made on the basis of the reasons recorded for reopening the assessment, the AO lost jurisdiction to assess income under other heads. The Tribunal, however, upheld the validity of the reassessment proceedings, noting that the AO had made an addition of Rs. 3,50,000/- on account of stamp duty for the purchase of the property, which was related to the reason for reopening the assessment. The Tribunal found no substance in the argument that the reassessment proceedings should be invalidated.

2. Taxability of Salary Income Earned Abroad:
The AO included Rs. 19,25,067/- as salary income earned by the assessee from a foreign employer, arguing that the assessee was a resident in India and the income was taxable in India. The assessee contended that he was a non-resident during the relevant financial year, having stayed outside India for more than 187 days, and therefore, the salary income earned abroad was not taxable in India. The Tribunal referred to section 6 of the IT Act and various judicial precedents, concluding that the assessee was a non-resident since he stayed outside India for more than 182 days. The Tribunal held that the salary income earned abroad and received outside India was not taxable in India, setting aside the addition made by the AO and upheld by the CIT(A).

3. Addition on Account of Stamp Duty Payment:
The AO made an addition of Rs. 3,50,000/- as unexplained investment under section 69A of the IT Act, related to stamp duty for the purchase of the property. The CIT(A) reduced this addition to Rs. 1,75,000/-, noting that the property was jointly owned by the assessee and his wife, and thus, the investment should be shared equally. The assessee argued that the stamp duty was paid by his wife, Mrs. Vandana Bhardwaj, as evidenced by the records of M/s Landcraft Developers Pvt. Ltd. The Tribunal agreed with the assessee, noting that the payment was indeed made by Mrs. Vandana Bhardwaj and there was no reason to attribute 50% of the payment to the assessee. The Tribunal directed the AO to delete the addition, finding the CIT(A)'s decision contradictory.

Conclusion:
The Tribunal partly allowed the appeal filed by the assessee. It upheld the validity of the reassessment proceedings but directed the deletion of the addition related to the salary income earned abroad and the stamp duty payment. The decision was pronounced in the open court on 14.06.2021.

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