TaxTMI 
TaxTMI 
2025 (1) TMI 901
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....f the case and in law, the CIT erred in upholding AOs stand in denying salary exemption claimed under section 9(1)(ii) of the Act and concluding that the salary received by Appellant from her international assignment shall be deemed to accrue or arise in India under section 5(2) of the Act. 2.2. Without prejudice to the above grounds of appeal, the CIT erred in upholding AOs stand in making an addition of INR 45,08,074 in respect of salary received by the Appellant instead of INR 41,59,580 claimed exempt in the return of income. 3. That on facts and circumstances of the case, the AO has erred in not allowing deduction of INR 1,10,000 claimed as deduction under chapter VIA of the Act by the Appellant in return of income. 4. That on facts and circumstances of the case, the AO has erred in not granting the credit of taxes deducted at source ('TDS') amounting to INR 13,17,237 while computing the amount of demand payable by the Appellant. 5. That on facts and in circumstances of the case, the AO has erred in computing excess interest under section 234B and 234C of the Act while computing the amount of demand payable by the Appellant. 6. That on the facts and circumstan....
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.... India Limited had paid salary of Rs. 45,08,074/-, on which TDS of Rs. 13,17,237/- was deducted. The appellant filed Retum of income in ITR-2 on 29.07.2013. As per the computation of total income, total salary of Rs. 50,45,173/- was shown as income. The salary was shown as reflected in Form 26AS and Form No. 12BA issued by M/s. BG Exploration & Production India Limited. The salary of Rs. 41,59,580/- was claimed as exemption under section 9(1)(ii) of the IT act. In the computation of total income, the appellant claimed deduction of Rs. 1,00,000/- under section 80CC, 80CCC and 80CCD and of Rs. 10,000/- under section 80TTA. During the appellate proceedings, the appellant has provided a copy of ITR, Form 26AS, Form no.12 BA issued by the employer, a copy of bank statements of Citibank and a copy of passport. Even though the appellant has claimed the salary of Rs. 41,59,580/- as exempt income as per section 90 of the IT act. The appellant did not provide any explanation or details regarding as to how the salary was claimed exempt under section 90 of the IT act. The appellant had not provided the tax residence certificate of Government of Egypt. The appellant had also not provided any ....
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....exercised in other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State. From the facts of the case of the appellant, the appellant has not brought on record that the employment was exercised in Egypt or not. Therefore, provisions of Article 16 are not applicable in the case of the appellant. In view of the above facts and discussion, the adjustment of salary income of Rs. 45,08,074/-." 4. The ld AR submitted that the assessee has been deputed to Egypt w.e.f. 1st August 2012 as mentioned in the assignment letter (page 54 of PB) and has stayed in India only for 108 days during the previous year relevant to AY 2013-14. The ld. AR further submitted that the assessee accordingly is a non-resident for the year under consideration and therefore the salary income for services rendered outside India which accrues outside India is not taxable in India as per the provisions of section 9(1)(ii) of the Act. The ld. AR also submitted that the CIT(A) is not correct in confirming the addition made by the AO merely for the reason that the salary is received in India by invoking the provisions of section 5(2)(a) of the ....
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....of section 9(1)(ii) of the Act which read as under have to be looked into - "9. (1) The following incomes shall be deemed to accrue or arise in India :- (i) ***** (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 period which is preceded and succeeded by services rendered in India and forms part of the service contract of employment, shall be regarded as income earned in India ; 8. From the plain reading of the above provisions it is clear that the salary income earned for services rendered in India only are to be regarded as income earned in India. Therefore the argument of the ld AR is that the assessee has rendered services in Egypt from 01.08.2012 and the salary income attributable towards services rendered outside India cannot be taxed in India. The contention of the revenue is that the salary even for the services are rendered outside India, is paid by Indian entity to assessee's bank account in India and that the assessee continued to be....
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....t of the work discharged by him on board during the said period which is outside the shores of India. b) The CIT (A) has placed reliance in the case of CIT Vs. Avtar Singh Wadhwan [2001] 247 ITR 260 (Bom) wherein it has been held that salary received by the non resilient marine engineer for services rendered by him on a foreign going Indian ship which mainly remained away from the Indian coast during the relevant accounting year accrued outside India and was not taxable in India. While answering the question of law there under with reference to Section 9(1)(Xii) in the said case it has also been held that the salary which is earned in India will alone be regarded as income arising in India and not otherwise. The principles laid down in the said case are 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 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 rendered in India it becomes ta....
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..... The sole basis/ reason for exercising jurisdiction under section 263 by the Ld. Pr. CIT is that, the claim of deduction of salary amounting to Rs. 40,04,830/- has not been properly examined by the Assessing Officer while allowing the said deduction. The assessee, who is employed with M/s Reliance Industries Limited, was deputed as Country Manager to Kurdistan, Iraq, w.e.f 16/4/2010 for the purpose of his employment in Iraq he has received salary. In the annual return of income filed in India on 14/7/2011, assessee has claimed exemption of salary earned outside India amounting to Rs. 40,04,830/- out of total salary received at Rs. 43,68,905/-. The said return though has been filed in the status of "non-resident", however, from the perusal of the assessment order, it is seen that the Assessing Officer has framed the assessment in the status of "resident". Be it that as may be, from the material facts which have been placed before the Ld. Pr. CIT and also before the Assessing Officer during rectification proceedings u/s 154, post assessment proceedings, it is seen that the assessee has given entire details of number of days for which assessee had stayed outside India which has been ....
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....ame is not applicable here. For the purpose of present case, only criterion, which is to be seen, is whether the assessee can be said to be resident in India in terms of clause (a) which clearly stipulates that assessee should have been resident in India for a period of 182 days or more. If the assessee in the previous year has not stayed in India for more than 182 days, then ostensibly such an income cannot be taxed in the hands of the assessee individually as a resident of India. The assessee before the Pr. CIT and also before the Assessing Officer has given the following details of number of days which assessee has stayed outside India:- "No. of days assessee stayed out of India i.e. in Kurdistan, Iraq Date of leaving India Date of reporting to India No. of days stayed out of India 26/04/2010 25/05/2010 30 02/06/2010 29/06/2010 21 14/07/2010 09/08/2010 27 25/08/2010 17/09/2010 24 11/10/2010 15/11/2010 35 11/12/2010 11/01/2011 32 06/02/2011 08/03/2011 31 28/03/2011 31/03/2011 03 Total days stayed out of India 203 8. This factum has not been disputed either by the Assessing Officer or by the Ld. Pr. CIT before whom these facts were brought on reco....