TaxTMI 
TaxTMI 
2024 (3) TMI 197
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....ppeal has taken the following grounds of appeal: "1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the A.O. holding that the appellant assessee qualified as resident but ordinarily resident in India and DTAA with the United States of America was not applicable to the assessee in respect of his global income ignoring the provisions of Section 90 of the Act. 2. a. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the addition of Rs. 42,58,111/- being salary earned in USA while residing in that country as fully taxable in India though as per Article 4(1) & 4(2) of the DTAA, the assessee qualified as a resident of USA and therefore income earned as salary should have been taxed there. b. For that Ld. CIT(A) ought to have held that even otherwise, the salary amounting to Rs.42,58, 111/- earned by the assessee in the USA was not taxable in India. 3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming an addition of Rs.4,10,558/-, being dividend earned in the USA, which ought not to ....
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....he assessee in respect of salary income earned in USA. 4.1 Being aggrieved by the above action of the Assessing Officer, the assessee preferred an appeal before the CIT(A) and reiterated that in view of Article 16 of the DTAA, the salary income of the assessee was taxable in USA and not in India. However, the Ld. CIT(A) did not agree with the contention of the assessee and confirmed the addition so made by the Assessing Officer, observing as under: "3. After giving a thoughtful consideration to the facts of the case and the provisions of law, I am unable to agree with the contentions of the Ld. AR of the appellant. From the facts on record it is clearly discernible that the appellant was a resident and ordinary resident of India within the meaning of Section 6 of the Act. It is further noted that the sources of income of the appellant was far greater in India in comparison to USA in as much as the taxable income derived in India was in excess of Rs.52 lacs during the year in comparison to Rs.48 lacs earned in USA. On these facts therefore I am of the considered view that, both from the point of view of the period of stay in the Country as well as the relative economic n....
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....de India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee........." 4.3 A perusal of the above reproduced provisions of section 90 of the Act would reveal that the Central Government may enter into an agreement (DTAA) with Government of any country outside India for grant of relief in respect of income tax chargeable under the Act and under the corresponding law in force in that other country. Sub-Section (2) to section 90 provides that where the Central Government has entered into an agreement (DTAA) with the Government of any other country, then in relation to the assessee to whom such agreement applies in, the provisions of the Act shall apply to the extent they are more beneficial to the assessee. So, as per the provisions of section 90 of the Act, the assessee have an option to choose either the DTAA or the provisions of the Income Tax whichever is beneficial to him for the purpose of taxation of his incom....
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....fore, Clause (b) & (c) are not attracted in the case of the assessee. As per Article 16(1) of the Indo-US DTAA, such salary income of other similar remuneration, drived by a resident of a contracting state^% (in our case in 'India') in respect of an employment exercised in the other State (in our case 'USA') is taxable in that other state (USA). However, as per Article 16(2), notwithstanding the provisions of Article 16(1), if the conditions stipulated in Article 16(2) are attracted then the said salary or similar remuneration will be taxable in the contracting state of which the resident/assessee is a resident of. 5.1 Now, the moot point, raised by both the parties before us, is as to whether the Clause (a), (b) & (c) to Article 16(2) of the Indo-US DTAA are to be read together and that of the three clauses have to be simultaneously applied to see as to whether the salary income of a resident is liable to be taxed in the state of which the assessee is the ordinary resident or in the other contracting state where he has exercised his employment and received the remuneration. A perusal of the provisions of Article 16(2) reveals that Clause (a), (b) & (c) have been written togethe....