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2024 (2) TMI 1045 - AT - Income TaxTaxability of salary income in India while rendering service in abroad - assessee is NRI - income accrued inside or outside India - assessee is a non-resident employee in an Indian Company IBM India Pvt. Ltd. and was sent abroad to UK for rendering services there and service was rendered in UK though the appointment made in India - relief as per DTAA between India and United kingdom denied for the want of tax residency certificate by the AO HELD THAT:- The assessee has received total salary and the same has been returned and offered to tax in UK. The income tax return and certificate of residence has been placed on record. Once the assessee qualifies to be treated as non-resident u/s 6 of the Act then the scope of the taxable income is in the hands of assessee would be as per Section 5(2)(b) of the Act. In the present case also the assessee undisputedly is a non-resident and therefore the salary received by the assessee while rendering service in abroad is not taxable in India. The case of the assessee finds support from the decision of Arvind Singh Chauhan [2014 (3) TMI 18 - ITAT AGRA] wherein held once it is not in dispute that the assessee qualifies to be treated as a 'non-resident' under Section 6 of the Act, as is the undisputed position in this case, the scope of taxable income in the hands of the assessee, under Section 5(2), is restricted to (a) income received or is deemed to be received in India, by or on behalf of such person; and (b) income which accrues or arises, or is deemed to accrue or arise to him, in India. Therefore, it is only when at least one of these two conditions is fulfilled that the income of a non-resident can be brought to tax in India. In the present case, the services are rendered outside India as crew on merchant vessels and tankers plying on international routes. A salary is compensation for the services rendered by an employee and, therefore, situs of its accrual is the situs of services, for which salary paid, being rendered. Appeal of the assessee is allowed.
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