Treaty residence under the India-Singapore DTAA protected Singapore salary from Indian taxation on tie-breaker facts.

Salary earned in Singapore was held not taxable in India for the relevant period because treaty residence under the India-Singapore DTAA prevailed over the domestic residence test. The assessee had shifted to Singapore for employment, obtained a Singapore tax residency certificate, and was treated as resident in both States only for treaty purposes. Article 4(2) required sequential application of the tie-breaker rules-permanent home, centre of vital interests, habitual abode, and nationality-and the facts supported Singapore residence for that period. With treaty protection available under section 90(2) and the income already taxed in Singapore, the same salary could not be brought to tax again in India, so the addition was deleted.

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Issues: Whether salary income earned in Singapore during the relevant period was taxable in India in view of the assessee's residential status under the India-Singapore DTAA and the applicable tie-breaker rules.

Analysis: The assessee had shifted to Singapore with family for employment during the relevant period and produced a Singapore tax residency certificate. The domestic law residence test under section 6(1)(a) of the Income-tax Act, 1961 was not treated as conclusive for treaty purposes. For a person resident in both States, Article 4(2) of the DTAA required application of the tie-breaker tests in sequence, namely permanent home, centre of vital interests, habitual abode, and nationality. On the facts found, the assessee's stay and employment in Singapore during the period in question, together with the availability of treaty protection under section 90(2), supported treatment as a resident of Singapore for that period. The income earned in Singapore had already suffered tax there and could not again be brought to tax in India.

Conclusion: The Singapore salary income was not taxable in India for the relevant period, and the addition made by the Assessing Officer was deleted.

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