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2016 (3) TMI 15 - AT - Income TaxResidential status - resident or nonresident of India - application of article 16(1) of Indo-USA DTAA denied - taxability of income - nationality - Held that:- As the facts emerge from record t the assessee’s residential status as nonresident has been accepted by the ld Assessing Officer, therefore, there is no justification on the part of the ld CIT(A) to hold that the assessee was a resident. It has not been disputed that the services in question was rendered by the assessee in US and taxed in the USA, which is evident from the relevant record filed on the paper book. The applicability of article 16(1) of Indo- USA DTAA depends on the country where services are rendered which in this case is undisputedly USA. The application of article 16(1) of Indo-USA DTAA cannot be denied to assessee merely because the salary check was paid by an Indian entity and the undisputed fact that no service was rendered by assessee for the impugned period in India. The Hon'ble Supreme Court in the case of Kedar Nath Jute Mnf. Co Ltd. Vs. CIT (Central) Kolkata [1971 (8) TMI 10 - SUPREME Court] has held that actual and legal nature of the transaction will decided the taxability and not mere book entries or assumptions. In view thereof, judgments in the case of CIT Vs. Nippon Limited (1998 (4) TMI 121 - CALCUTTA High Court), CIT Vs. Khambaty (1985 (10) TMI 91 - BOMBAY High Court) and Ranjit Kumar Bose Vs. ITO 18 ITD 230 (1986 (2) TMI 96 - ITAT CALCUTTA-C ), hold that the nonresident assessee is not liable for tax in India on the impugned amount. - Decided in favour of assessee
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