TMI Blog2018 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant assessment year. In our opinion the authorities under the Income Tax Act did not properly apply the provisions of law to the case of the assessee. We are of the view that the Assessing Officer was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year. - GA 3745 of 2016 With ITAT 374 of 2016 - - - Dated:- 13-7-2018 - MR. ANIRUDDHA BOSE AND MR. ARINDAM SINHA, JJ. For The Appellants : Mr. J.P. Khaitan, Senior Advocate, Mr. R.S. Padjekar, Mr. R.K. Biswas, Mr. P. K. JhunJhunwalla, Mr. S. Rudra For The Respondent : Mr. Debashis Chowdhury, Advocate ORDER ANIRUDDHA BOSE, J.:- 1. The appellants are legal heirs of the original assessee, who passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had admitted the appeal on 11th July 2017 on the following question:- Whether on the facts and in the circumstances of the case and in law, income by way of salary which became due and has accrued to the assessee, a non-resident, for services rendered outside India and which is not chargeable to tax in India on the due or accrual basis, can be said to be chargeable to tax on the receipt basis merely because the foreign employers, on the instructions of the assessee, have remitted a part of amount of salary to the assessee s NRE bank account in India? 4. This judgment is assailed before us by Mr. Khaitan, learned Senior Counsel appearing on behalf of the appellant. His submission is that income of the assessee constituted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant accounting year accrued outside India and was not taxable in India. While answering the question of law there under with reference to Section 9(1)(Xii) in the said case it has also been held that the salary which is earned in India will alone be regarded as income arising in India and not otherwise. The principles laid down in the said case are squarely applicable to the facts of present case also. (c) The criteria of applying the definition of Section 5(2)(b) would be such income which is earned in India for the services rendered in India and not otherwise. (d) Under section 15 of Act even on accrual basis salary income is taxable i.e., it becomes taxable irrespective of the fact whether it is actually received or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in our opinion the interpretation be given to sub Section (b) of Section 5(2) of the Act would also apply to Section 5(2)(a) of the Act. The Circular is clarificatory in nature and is applicable for construing the aforesaid provision for the relevant assessment year. In our opinion the authorities under the Income Tax Act did not properly apply the provisions of law to the case of the assessee. We are of the view that the Assessing Officer was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year. We accordingly allow the appeal and answer the question framed by us in favour of the assessee. 7. Urgent Photostat certified copy be given to the parties expeditiously, if applied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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