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2012 (7) TMI 404 - AT - Income TaxIncome received or deemed to be received or accrued or arose or deemed to be accrued or arose in India - Income by way of brokerage and commission - assessee maintains a NRE account with South Indian Bank of Anna Nagar at Chennai - Held that:- The assessee is a permanent resident of Singapore with his salary income taxed as per Singapore's tax laws and also earning income by way of brokerage and commission remitting the proceeds through cheques and demand drafts to assessee's Indian bank account through Telegraphic transfer - It is after having received the brokerage and commission in the accounts of the foreign correspondent banks that those funds are transferred to assessee's Indian bank account in foreign currency. Thus landing of the brokerage and commission transmitted to India through TTs are first landed in the accounts of the foreign correspondent banks outside India, it is to be seen that the assessee received his brokerage and commission outside India. It is only after receiving those brokerage and commission outside India that the corresponding funds were transferred to the assessee's Indian bank account by TTs - as DTAA overrides Indian Income-tax laws therefore, in view of Article 7 the profits of an enterprise of a contracting State shall be taxed only in that State except where the enterprise has a permanent establishment in other contracting States - decided in favour of assessee. Addition being 25% of the jewellery as unexplained in the hands of the assessee - gifts of jewellery made by the assessee to relatives - Held that:- Even if the assessee has spent some funds in gifting gold jewellery to his family members, those funds emanated from non taxable funds available in his bank account. It does not belong to any income liable for taxation in India. Therefore, even if the proposition of the CIT(A) is accepted, there is no justification for making any addition in the hands of the assessee - in favour of assessee.
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