AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1816
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....2.1 The learned CIT(A) has erred in denying exemption under article 15(1) of DTAA for bonus payments amounting to INR 1,040,052/- pertaining to services rendered in China. 2.2 The ld. CIT(A) failed to appreciate the fact that the Appellant, being a tax resident of China and a non-resident of India is eligible to claim exemption under Article 15(1) of the DTAA between Indian and China. 2.3 The ld. CIT(A) has not appreciated the fact that as per Article 15(1) of the DTAA, the appellant is taxable only in the country where he is a resident and exercising employment (China). 2.4 The ld. CIT(A) has erred in stating that bonus forms part of the compensation for the social needs of the appellant and for being an employee of the legal employe....
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....payment of taxes in China along with the breakup of salary components forming part of the overseas return of income and copy of the debit notes to substantiate the recharge of salary costs (including bonus) by the home entity. These were duly filed by the assessee and taken on record by the learned AO. 3.2 In addition, the assessee had also filed various documents/details to support the exemption claimed under Article 15(1) of the DTAA. 3.3 However, the learned Assessing Officer held that the assessee held dual employment one with the original employer at the home country and another with the economic employer at the host entity and accordingly divided the salary compensation in two parts. Further, the Assessing Officer held that bonus is....
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....reward as it is a part of social obligation of the original employer. Accordingly to the CIT(A), held that AO has rightly treated bonus as the contribution of the original employer, whether or not recharged by the second employer, as bonus payments are made for the purpose of employment exercised being an employee accordingly he upheld the action of the AO as treating bonus amount paid chargeable to tax in India. Accordingly dismiss the ground taken by the assessee. Against this, the assessee is in appeal before us. 5. The ld. Ld. A.R submitted that CIT(A) erred in not granting the exemption under Article 15(1) of DTAA. Further he relied on the judgment of Karnataka High Court in the case of DIT (International Taxation) v. Prahlad Vijendr....
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....said case is squarely applicable to the facts of present case also. (c) The criteria of applying the definition of section 5(2)(b) would be such income which is earned in India for the services rendered in India and not otherwise. (d) Under section 15 of the Act even on accrual basis salary income is taxable i.e., it becomes taxable irrespective of the fact whether it is actually received or not: only when services are rendered in India it becomes taxable by implication. However. If services are rendered outside India such income would not be taxable in India. The Explanation to section 9(1)(ii) has been taken note of while answering the substantial question of law in favour of the assessee and to negative the contentions of the reven....
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....For the sake of clarity, Article 23 of the India-China DTAA is reproduced as under: ARTICLE 23 METHODS FOR THE ELIMINATION OF DOUBLE TAXATION 1. In China, double taxation shall be eliminated as follows : (a) Where a resident of China derives income from India the amount of tax on that income payable in India in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China. (b) Where the income derived from India is a dividend paid by a company which is a resident of India to a company which is a resident of China and w....