TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 236
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....onal Assessing Officer (Ld. JAO) to treat the Appellant as a Resident of Kazakhstan for the period 01 January 2018 to 31 March 2018 as per Section 90 of the Income-tax Act, 1961 (Act) read with Article 4(2) of India-Kazakhstan Double Taxation Avoidance Agreement ('DTAA'). It is prayed that Ld. JAO be directed to treat the Appellant as a Resident of Kazakhstan for period 01 January 2018 to 31 March 2018 as per Section 90 of the Act read with Article 4(2) of India-Kazakhstan DTAA. Ground No. 2 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not directing the Ld. JAO not to tax salary income amounting to Rs. 71,60,922 for the period of services rendered in Kazakhstan (i.e., from 01 January 2018 to 31 March 2018) as per Section 90 of the Act read with Article 15 of the India-Kazakhstan DTAA It is prayed that Ld. JAO be directed not to tax salary income of Rs. 71,60,922 for the period of services rendered in Kazakhstan as per Section 90 of the Act read with Article 15 of the India-Kazakhstan DTAA. Ground No. 3 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not directing the Ld. JAO not to ....
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....x (Appeals), National Faceless Appeal Centre [Ld. CIT(A)] erred in mentioning in para 6.1.1 of his Order, that the details to determine the Residential Status of the Appellant as per Article 4(2) of the India-Kazakhastan Double Taxation Avoidance Agreement ('DTAA') were not before the Ld. Assessing Officer (Ld. AO). It is prayed that the details as well as submissions made before the Ld. AO in support of determining the Residential Status of the Appellant as per Article 4(2) of the India-Kazakhastan Double Taxation Avoidance Agreement ('DTAA') are reproduced on Pages 4 to 7 of the Order of the Ld. CIT(A). Additional Ground No.2 Without prejudice to all the Grounds of Appeal, on the facts and circumstances of the case and in law, the Order of the Ld. CIT(A) is bad in law. It is prayed that the Order of the Ld. CIT(A) be set aside and due reliefs be allowed to the Appellant." 3. The relevant facts in brief are that the Assessee is an individual. For the Assessment Year 2018-2019, Assessee filed original return of income on 14/08/2018 declaring income of INR.4,18,44,660/-. Subsequently, the Assessee filed the revised return on 31/03/2019 declarin....
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.... 1. The assessee is a Resident in India u/s. 6 of the I.T.Act, 1961 and is required to disclose his global income for taxation under Indian Law. 2. Any rental income from foreign immovable property is also required to be mandatorily disclosed and taxed under Indian Law. Such income is not exempt and is taxable u/s 22 of the I.T. Act, 1961. 3. In the Original Return of income filed by the assessee for the year under consideration, the assessee has declared his Residential Status as 'Resident'. Also, while filing the revised return of income the assessee has declared his Residential Status as 'Resident'. 4. If an assessee is a resident in India, there global income is taxable in India. This income may have been earned or received outside-but it shall be taxed in India. In this case income is also taxable in another country assessee can take benefit of DTAA. 5. Further assessee has not provided any passport details regarding his stay in abroad during the F.Y. 2017-18. Hence, his period of stay in abroad cannot be verified." 6. On the basis of the above observations, the Assessing Officer concluded that the Assessee was liable to pay tax in In....
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....We have heard both the sides and have perused the material on record 10. We note that before the Learned CIT(A) the Assessee had filed submissions which have been reproduced in Paragraph 5 of the order passed by Learned CIT(A). On perusal of the same it emerges that: (a) Assessee is New Zealand national. He was on assignment in India from 01/08/2007 to 06/08/2017. (b) Post completion of his assignment in India, the Assessee was sent on assignment to Kazakhstan from 07/08/2017. (c) The Assessee was in India for more than 59 days during Financial Year 2017-2018 and more than 364 days in the immediately preceding 4 Financial Years. Therefore, as per Section 6 (6) of the Act, the Assessee filed his Original Return of Income for the Assessment Year 2018-2019 as a 'Resident' offering to tax in India his global income. (d) The Assessee was on assignment in Kazakhstan since 07/08/2017. As per domestic laws of Kazakhstan 'tax year' followed is the calendar year. Post December 2018, the residential status of the Assessee in Kazakhstan was determined as 'Resident' for the tax/calendar year 2018. (e) As a result, for the period 01/01/2018 to 31/0....
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....s, for the purpose of the Act, the residential status determined as per the Section 6 of the Act would apply for the entire Previous Year. 13. On the other hand we find that DTAAs entered by the India do not provide for separate mechanism to determine the residential status and accept the residential status as determined by the respective domestic laws of the Contracting States. However, for the limited purpose of applying the provisions contained in different Articles of DTAAs, a mechanism is provided to determination of residential status of a taxpayer to deal with a situation where such taxpayer is determined to be a resident of both the Contracting States as per the respective domestic tax laws. This is necessitated for effective application of the provision contained in articles of DTAAs as the DTAAs allocate taxing rights between the Contracting States on the premise that one State is the 'Residence State' while the other State is the 'Source State'. In case both the States are considered as 'Resident States' the application of provisions contained in various articles of DTAAs becomes unworkable. To avoid the said situation, the tax treaties provide for a tie-breaker rule ....
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....determined as follows : a) he 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 or vital interests); (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; (d) if he is a national of both States or of neither of them the competent authorities of the Contracting States shall settle the question by mutual agreement." 18. We note that the Assessee is nation of New Zealand who was on assignment in India and moved to Kazakhstan in August, 2017 on another assignment. The Assessee did not have permanent home in India thereafter, and was residing in Kazakhstan. On assignment to Kazakhstan, his payroll was also s....
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....f arguments that the stand taken by the Revenue is correct and the Assessee is resident in India, there is no dispute as to the fact that the employment was exercised in Kazakhstan. The Revenue has not even set-up a case that the Salary should be taxed in India in terms of Article 15(2) of the DTAA. 22. In view of the above, we delete the addition of INR. INR.71,60,922/- made by the Assessing Officer in respect of Salary for Overlapping Period. Rental Income 23. It is admitted position that Assessee owned a house property in London, United Kingdom and the same was let out during the relevant previous year. In the Revised Return of Income, Assessee offered to tax income from the said house property for the period 01/04/2017 to 31/12/2017 amounting to INR.3,80,590/-. The income from House Property amounting to INR.1,26,863/- for the Overlapping Period was not offered to tax. The Assessing Officer brought to tax the aforesaid income in the hands of the Assessee. 24. It is the contention of the Assessee that income from house property amounting to INR.1,26,863/- pertaining to Overlapping Period is not taxable in India. The Assessee had claimed benefit of Article 22(1) of DT....
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....f India, rental income arising from immovable property would not be taxable in India. Accordingly, we delete the addition INR.1,26,863/- made by the Assessing Officer in respect of rental income. Dividend 27. As regards addition of INR.3,15,436/- made by the Assessing Officer in respect of dividend income is concerned, we find that the aforesaid dividend income has been earned during the Overlapping Period in respect of shares held in Netherlands. While the Assessee has claimed the benefit of Article 10(1) of the DTAA between India and Kazakhstan, in our view, the benefit of same cannot be extended to the Assessee. The source country for dividend income is Netherlands. It is not the case of the Assessee that the Assessee was residents of Netherlands during the relevant previous year. Therefore, the relevant DTAA would be the DTAA between India and Netherlands. For the application of articles of the said DTAA, the Assessee would be considered as resident in India. Article 10 of the DTAA between India and Netherlands, allocates taxation of rights between the Contracting States. Since the relevant facts for adjudication of the said Article of DTAA between India and Netherlands a....