TaxTMI 
TaxTMI 
2023 (8) TMI 138
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....lly and exclusively for Ingersoll Indonesia, since 09 November 2015. The Appellant was considered a Resident and Ordinarily Resident in India during AY 2016-17 as per the domestic tax laws of India as he was present in India for more than 181 days and more than 729 days in the last 7 years. While on assignment to Indonesia, the Appellant continued to receive his salary through India payroll by credit to his bank account in India for administrative convenience. As the payroll of the Appellant continued in India, Ingersoll Rand Climate Solutions Private Limited (Ingersoll India) had deducted and deposited the taxes section 192 of the Income Tax Act, 1961 (the 'Act') and had issued a Form 16 to the Appellant for the AY 2016-17. The Appellant filed his return of income in India offering total income of INR 51,50,320 on 22 July 2016. Appellant had claimed that as he was rendering services for PT Trane Indonesia, the Appellant was subject to tax in Indonesia on his employment income for the year 2016 and accordingly the Appellant has duly filed his tax return in Indonesia for Calendar Year 2016. It was claimed before Ld. AO that the Appellant qualified as a Resident of Indonesia ....
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.... the CIT(A) has erred in not considering personal and economic relationship, habitual abode for concluding on the residential status as per Article 4(2) of Treaty That on facts and in the circumstances of the case and in law, the CIT(A) erred by ignoring the fact that the Appellant had applied the provisions of Article 4(2) of the Treaty dated February 04, 1988 and has erred in concluding that Treaty dated February 04,1988 need to be applied. 5. That on facts and in the circumstances of the case and in law, the CIT(A) has erred in concluding that the Appellant is not eligible for exemption of his salary income for the period January 01, 2016 to March 31, 2016 in terms of the Article 15(1) of the Treaty. 6. That on facts and in the circumstances of the case and in law, the CIT(A) has erred in concluding that the AO was justified in bringing into tax the global income of the Appellant for the period January 01, to March 31, 2016 in India, with no credit for the taxes paid in Indonesia on the doubly taxed income as per Article 23 of the Treaty." 4. Heard and perused the record. 5. The ld AR reasserted the fact and referred to the relevant documents available in....
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....period. The same is reproduced for ready reference: "Shri Narinder Pal Singh 2016-17 1. On careful perusal of your reply dated 3rd September, 2018, the undersigned has reached on the conclusion that the income earned by you form 1st January 2016 to 31st March 2016 should be treated as your income, income in India, and should be a part of your Indian ITR. 2. Facts of the case clearly indicate that you have been a resident of India till December, 2016. The four following points need a brief mention here: (i) Permanent House: Since you have been a permanent resident of India for most of your life and also own a residential property which used to be your residence till Dec, 2016, merely renting out an accommodation for work purposes, that too far a small period of 3 months in the concerned F.Y. does not make it your permanent house. ii) Social and economic ties: Merely changing your work place, does not change your social and economic ties. You have been an Indonesian resident for 3 months in the concerned F. Y. and this is too short a period to from social and economic bonds. (iii) Habitual Abode: On perusal of your reside....
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....medical insurance plan, job assignment letter, school fee receipts for children of the appellant studying in Indonesia and lease agreement of the property occupied by the appellant in Indonesia during the Financial year 2015-16 to 2017-18. Same should have been commutatively taken into consideration to determine the question of permanent home available to the assessee. 12. On the part of the revenue there is nothing before the bench to show that if 'permanent home available' has been defined in a manner that if an individual holds of a residential property in India it has to be considered to be 'permanent home available' for the purpose of Article 4 of the relevant DTAA. If that be the case then the benefit of the Article 4 for the purpose of 'permanent home available' can be given to assessee only if he does not own a residential house in India or if he has his own residential house in the contracting state. Such seems to be not the intention of law. 13. The Ld. Tax authorities have fallen in error in giving a literal interpretation to words 'permanent home available' referred in Article 4 of relevant DTAA, which certainly is not 'permanent house' as understood by the Ld. Ta....
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....to be taxable in India. 16. The coordinate bench in Sameer Malhotra Vs. ACIT in ITA No. 4040/Del/2019 vide order dated 28.12.2022 has decided a similar controversy surrounding 'permanent home' clause in India-Singapore DTAA, of which Article 4 is para materia and has made following relevant observation in para 7, which squarely apply to facts of present case:- "7.4 Further, as per UN Model Commentary, the concept of home has been defined as under : "13. As regards the concept of home, it should be observed that any form of home may be taken into account (house or apartment belonging to or rented by the individual, rented furnished room). But the permanence of the home is essential; this means that the individual has arranged to have the dwelling available to him at all times continuously, and not occasionally for the purpose of a stay which, owing to the reasons for it, is necessarily of short duration (travel for pleasure, business travel, educational travel, attending a course at a school, etc.). " 7.5 Further, as per UN Model, the facts to which the special rules will apply are those existing during the period when the residence of the taxpayer affe....
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....the India-USA Double Taxation Avoidance Agreement (Treaty) has to be done based on the tie breaker analysis as contained in Article 4(2) of the Treaty. 7.10 It is pertinent to mention herein that both the authorities below have not doubted the tax residency certificate issued by the Singapore authorities for the period under consideration and on the basis of that, the Income tax has already been paid by the Appellant in Singapore. Further, may be, the Appellant has stayed more than 182 days in India, however, he also qualified as resident of both India and Singapore under Article 4(1) of the Treaty. As per clause (a) of Article 4(2) of the Treaty, a person 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 in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests). The ld. Commissioner on the basis of tie-breaker questionnaire held that there is no doubt that even the centre of vital interest of the appellant are with India only and not with Singapore, as the majority of the savings, investment....