TaxTMI 
TaxTMI 
2019 (4) TMI 759
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.... verification of the same by the Assessing Officer during Appellate proceedings as mandated under Rule 46A of the Income Tax Rules,1962. 3. The Ld. Commissioner of Income Tax (Appeals) erred in holding the assessee was a Non-Resident during the year without offering any findings on applicability or other-wise of section 6 (1)(C) of the Income Tax Act,1961. 4. For these and other grounds that may be urged upon, the order of the CIT(A) may be reversed and that assessment order be restored." 3. The assessee is an individual. For the AY 2013-14, the assessee filed return of income declaring total income of Rs. 1,05,38,260. The assessee is a citizen of the United States of America (USA/US) and has been living and working in the USA since 1986. The assessee's spouse and 2 children are also citizens of the USA. 4. The assessee was working for Accenture USA continuously since 1998 till 2016 and was assigned on a temporary cross border assignment to Accenture India starting from June 2006 to August 2012. This assignment was subject to multiple extensions based on the business requirements of Accenture India till August 2012. On August 10, 2012 the assessee completed ....
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....nder which such determination can be made is as follows:- "ARTICLE 4 - Residence - 1. For the purposes of this Convention, the term resident of a Contracting State means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, citizenship, place of management, place of incorporation, or any other criterion of a similar nature, provided, however, that (a) this term does not include any person who is liable to tax in that State in respect only of income from sources in that State; and (b) in the case of income derived or paid by a partnership, estate, or trust, this term applies only to the extent that the income derived by such partnership, estate, or trust is subject to tax in that State as the income of a resident, either in its hands or in the hands of its partners or beneficiaries. (2) Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows : (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him ....
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....let out during the period of his Indian assignment (i.e. from April 01 2012 to August 10, 2012) and therefore for the purpose of the tie-breaker, deemed to be 'unavailable for use' to the assessee during this period, and accordingly, he did not satisfy the first test for availability of a permanent home in the USA and hence, tie-broke his residency to India for the aforesaid period. Additionally, once the test for 'availability of Permanent home' has been satisfied, it cannot move forward to the second test of 'Centre of vital interests'. However, if the first test had been a tie during this period, the second tiebreaker test for 'Centre of vital interests' has to be looked into. 10. Detailed below are specific points pertaining to the second tiebreaker test for 'Centre of Vital Interests' which substantiates that the assessee would tie-break his residency to the USA during the period April 1, 2012 to August 10, 2012 as well. April 1, 2012 to August 10, 2012 1 Dependent members The assessee's spouse and 2 children are citizens of the US and were living with him. 2 Personal belongings The assessee has two house properties and car along with all his person....
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....his residency to the US as it was determined that the assessee's social and economic interests were closer to US. 13. Detailed below are specific points pertaining to the second tiebreaker test for 'Centre of Vital Interests' which substantiates that the assessee would tie-break his residency to the US during the period August 11, 2012 to March 31, 2013. August 11, 2012 to March 31, 2013 1 Dependent members The assessee's spouse and 2 children are citizens of the US and were living with him. 2 Personal belongings The assessee has two house properties and car along with all his personal belongings in the US. 3 Voting rights The assessee is a citizen of the US and exercises his voting rights in the US. 4 Driving license The assessee holds a driving license in the US 5 Country of Residence The assessee's designated country of residence is the US. 6 Better Social Ties The assessee has been living in the US for 26 years and hence his social ties are closer to the US. 7 Investments The assessee has all his investments in shares, mutual funds, 401K plans and insurance policies in 8 Settlement The assesse....
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....ssessee cannot claim that his economic and personal relationship are suddenly closer to US than India. Rather by all logic the assessee economic and personal relationship is closer to India than to US for any given time. 4.8. Hence by applying the second criteria of article 4(2) of the Indo-US DTAA it can be clearly ascertained that the state with which his personal and economic relations are closer (centre of vital interests) is India. Thus for the AY 2013-14 if the assessee wants to tie break his residency to one of the states (India or US), it has to be definitely to India. Thus for the AY 2013-14 the assessee is a Resident and Ordinarily Resident as per the Act and also by the Indo-US DTAA tie breaking rules." 16. With regard to the concept of split residency, the AO held that there is no concept of split residency recognized under the provisions of the Income-Tax Act, 1961 ["the Act"] or the DTAA. 17. With regard to the claim for examination under Article 16(1) of the DTAA, the AO held as follows:- "6.6 The assessee in order to claim exemption under Article 16 (1) of Indo-US DTAA has to satisfy the following conditions, i. A Tax Residency Certi....