TaxTMI 
TaxTMI 
2016 (4) TMI 1323
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....resident assessee in India, including foreign allowances received outside India. 2. That the AO/CIT(A) have grossly erred in facts and law in disallowing the exemption claimed under Section 5(2) of the Act amounting to Rs. 32,25,165 by incorrectly stating that foreign allowances were received in India. 3. That the order of the AO/CIT(A) is perverse, since the issue of taxability of foreign allowances is decided on an incorrect assumption that such allowances are received in India, ignoring the details/evidences submitted by the assessee to substantiate that such foreign allowances are actually received outside India. 4. That the order of the CIT(A) is based on conjectures, surmises, incorrect application of law and erroneous assumptio....
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....ticed that the assessee has claimed exemption u/s.5(2) of the Act in respect of a sum of Rs. 32,25,164/- out of total salary of Rs. 38,14,991/- received from IBM India Pvt. Ltd. during the financial year 2010-11. It was seen that the assessee's employer, IBM India Pvt. Ltd. has deducted TDS of Rs. 10,14,355/- on the entire salary of Rs. 38,14,991/-, but the assessee claimed refund of Rs. 9,86,466/-. It was submitted before the lower authorities that the assessee, an IBM employee was sent on international assignment by IBM and TDS of Rs. 10,14,355/- has been deducted on his entire salary of income. The assessee has stated that as he is a non- resident, the income received or deemed to be received in India or accrued or deemed to be accrued i....
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....was to be taxed in India. However, the allowances cannot be taxed in India, as it is received outside India and the employer deducted TDS wrongly. The same was corrected by the assessee while filing the return of income and the foreign allowances received by the assessee cannot be taxed in India. As the assessee is a non-resident in India in the relevant assessment year, the provisions of sec.6(1) are attracted. Therefore, the ld. AR, submitted that the foreign allowances received by the assessee outside India for the services rendered are not taxable in India, in view of sec.5(2) of the Act. He relied on the order of the Tribunal in the case of ADIT v. Shri Kartik Vyas, Udaipur in ITA No.375/JP/2012 dated 31.12.2014, wherein it was observe....
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....India and the services are utilised in Indian Company for generation of income in India. According to the ld. DR, the above facts clearly establish that the salary as well as the allowances are taxable u/s.5(2) of the Act. He relied on the orders of the lower authorities. 9. We have heard both the parties and perused the material on record. The facts of the case are that the assessee has remained as an employee of IBM India Pvt. Ltd. The salary was administrated under home located salary plan as per which the salary would be paid in home location country to assessee's home location bank and the IBM India Pvt. Ltd. had deducted TDS on entire salary paid to the assessee. More specifically, the allowances had been deposited in Axis Bank accou....