Foreign tax credit and double taxation of salary income: ITAT Delhi found duplicate assessment unsustainable and allowed the credit.

Foreign tax credit was allowable where the taxes paid on additional overseas salary income were not disputed, and the assessee was entitled to credit for the foreign taxes paid on that income. The assessment could not sustain a second taxation of income already included in the original return, because only the differential salary from HSBC USA was offered during assessment while the larger amount had already been returned. The addition was therefore a double addition and had to be deleted.

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Issues: Whether the assessee was entitled to foreign tax credit of Rs. 98,852 and whether the addition of Rs. 29,37,294 represented double taxation of income already offered in the original return.

Analysis: The revised computation showed that only the differential salary income of Rs. 8,14,961 from HSBC USA was offered during assessment, while Rs. 29,37,294 had already been included in the original return. The assessment taxing the same income again was unsupported and resulted in double addition. As the foreign taxes paid on the additional overseas income were not disputed, the credit claimed for that amount was allowable.

Conclusion: The assessee was entitled to foreign tax credit of Rs. 98,852, and the addition of Rs. 29,37,294 was liable to be deleted.

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