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2020 (4) TMI 226 - AT - Income TaxIncome accrued in India - tax the salary income and the foreign allowance received by the assessee for services rendered outside India - Article 15(1) of India-Austria DTAA agreement and section 90 and section 5(2) of the Act - HELD THAT:- During the previous relevant to AY 2014-15, the assessee qualifies as a non-resident in India and as a tax resident in Austria. The salary and allowances are earned by the assessee in respect of employment rendered in Austria due to his foreign assignment. Hence, the first two conditions enumerated under Article 15(1) of the India-Austria DTAA stands satisfied. Therefore, the assessee’s claim of exemption in regard to his salary income as per the provisions of Article 15(1) of the India-Austria DTAA in the return of income filed by him is appropriate. In the case of ITO Vs. Sunil Chitranjan Muncif [2013 (11) TMI 222 - ITAT AHMEDABAD]on which reliance placed by the assessee, it was held that there was no dispute about the fact that the assessee is a NRI and the salary income received by him in India for employment exercised in UK has been offered by him for taxation in UK in pursuance of Article 16 of DTAA with UK. Hence, the salary received by the assessee was not taxable in India in pursuance of DTAA between India and UK. In the case of DIT Vs. Prahlad Vijendra Rao [2010 (11) TMI 803 - KARNATAKA HIGH COURT] on which reliance placed by the assessee, held that under section 15 of the 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 are rendered in India it becomes taxable by implication. However, if services are rendered outside India such income would not be taxable in India. Other objections raised by the Ld. AO that evidence was not produced for receiving the foreign allowance outside India and the bank account of the assessee maintained abroad was not produced is not relevant because the facts of the case establishes that the salary and the foreign allowance was received in India for the services rendered abroad and by virtue of DTAA and the Act, there is no bar in law for receiving the money in India. Hereby direct the Ld.AO to delete the tax imposed on the assessee with respect to his salary income and the foreign allowances earned by him outside India during the relevant assessment year. - Decided in favour of assessee.
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