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2023 (11) TMI 123 - ITAT VISAKHAPATNAMIncome deemed to accrue or arise in India - Salary receipts filled under NRI status - remuneration to the assessee was received in Nigeria but directly credited to his NRE account in India - assessee being a non-resident and engaged in on-shore projects has requested his employer in Nigeria to transfer the salaries to his NRE account in India to meet his family commitments - Ld. DRP concluded that the Ld. AO is absolutely correct in invoking the provisions of section 5(2)(a) - HELD THAT:- The assessee is employed in Nigeria is not disputed by the revenue. Since the salary is received by the assessee in NRE account in India, it cannot be considered as income in India, as services were rendered onshore by the assessee, the salary cannot be considered as accrued or deemed to accrue to the assessee in India and hence the provisions of section 5(2)(a) of the Act cannot be applied. From the bare reading of Section 9(1)(ii) salary shall be deemed to accrue or arise in India and shall be regarded as income earned in India, only when services are rendered in India. We find that there is merit in the argument of the Ld. AR wherein the CBDT Circular No. 13/2017 shall be applied to the assessee who is working on-shore and merely because of the use of the word “seafarer” in the Circular the benefit to the assessee cannot be denied. The clarification given by the Ministry of Finance in Circular No. 13/2017 is to mitigate the hardships faced by the assessees where a non-resident received his salary in the NRE account maintained with an Indian Bank, since conditions of his employment are not restricted to a single place but either in the ships or in the onshore projects elsewhere. We are therefore of the considered opinion that this beneficial Circular No. 13/2017 of the CBDT shall be applied to the instant case. Considering the above facts and circumstances of the case, we are inclined to quash the directions of the Ld. DRP and allow the grounds raised by the assessee.
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