TaxTMI 
TaxTMI 
2024 (3) TMI 543
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....er section 143(3) r.w. 144C(13) of the Act by Learned Assistant commissioner of Income tax, DCIT/ACIT - Int Tax, Gurgaon ("Ld. AO") in pursuant to directions of Learned Dispute Resolution Panel ("Ld. DRP") is wrong and bad in law and liable to be quashed. 2. That on the facts and circumstances of the case & in law, the Ld. DRP/AO has erred in making an addition of INR 1,66,92,600/- to salary income for the year under consideration ignoring the provisions of section 15 read with section 5(2) and section 9(1)(ii) of the Act, and without appreciating that the appellant is non-resident and such income earned in rendering services outside India. 3. That on the facts and circumstances of the case & in law, the Ld. DRP/ AO has er....
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.... * The assessee received salary for services rendered outside India 5. Under these facts, the taxability of the salary paid by the Indian company to a non-resident is examined with reference to the provisions of Section 5, Section 9, Section 15 of the Income Tax Act, 1961. Section 5 Income Tax Act reads as under: "Scope of total income. 5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or (c) accru....
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....ceived accrues and deemed to have accrued is taxable in India in case of a non-resident. Hence, it is imperative to examine the provisions of taxability of salary received by non-resident from an Indian company as per the provisions of section 9 of the Income Tax Act. Section 9 Income Tax Act reads as under: "Income deemed to accrue or arise in India. 9.(1) The following incomes shall be deemed to accrue or arise in India :- ^27(i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India. Ex....
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.... cinematograph film in India; (e) in the case of a foreign company engaged in the business of mining of diamonds, no income shall be deemed to accrue or arise in India to it through or from the activities which are confined to the display of uncut and unassorted diamond in any special zone notified by the Central Government in the Official Gazette in this behalf. ...................... ...................... (ii) income which falls under the head "Salaries", if it is earned in India. Explanation.-For the removal of doubts, it is hereby declared that the income of the nature referred to in this clause payable for- (a) service rendered in India; and (b) the rest period or leave pe....