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2014 (1) TMI 647 - AT - Income TaxAddition on account of Employee stock option scheme – Amount to be taxed in India – Held that:- Only proportionate salary would be taxable in India, if a part of activity done by the assessee has no relation to any India specific job or activity - the assessee was in India only for a short period i.e. 1.4.2006 onwards and that prior to it, he has not done any service connected with any activity in India – as the assessee has not rendered service in India for the whole grant period, only such proportion of the ESOP perquisite as is relatable to the service rendered by the assessee in India is taxable in India. Addition on account of hypo tax - Held that:- Following CIT vs. Dr.Percy Batlivala [2009 (12) TMI 811 - DELHI HIGH COURT] – Tax equalization policy provides that the company shall bear assessee's tax liability arising out of his foreign assignment - But company's liability will be restricted only to the extent of additional liability over and above that would have arisen had the assessee been in USA - if the assessee had no foreign assignment in India for which he is to be compensated by net of tax salary - the income arising in India is actual salary plus the incremental tax liability arising on account of Indian assignment - the claim of the revenue rejected – Decided against Revenue.
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