9911796707
TMI Blog2023 (8) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... since 09 November 2015. The Appellant was considered a Resident and Ordinarily Resident in India during AY 2016-17 as per the domestic tax laws of India as he was present in India for more than 181 days and more than 729 days in the last 7 years. While on assignment to Indonesia, the Appellant continued to receive his salary through India payroll by credit to his bank account in India for administrative convenience. As the payroll of the Appellant continued in India, Ingersoll Rand Climate Solutions Private Limited (Ingersoll India) had deducted and deposited the taxes section 192 of the Income Tax Act, 1961 (the 'Act') and had issued a Form 16 to the Appellant for the AY 2016-17. The Appellant filed his return of income in India offering total income of INR 51,50,320 on 22 July 2016. Appellant had claimed that as he was rendering services for PT Trane Indonesia, the Appellant was subject to tax in Indonesia on his employment income for the year 2016 and accordingly the Appellant has duly filed his tax return in Indonesia for Calendar Year 2016. It was claimed before Ld. AO that the Appellant qualified as a Resident of Indonesia for the Year 2016 (relevant for the period 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lationship, habitual abode for concluding on the residential status as per Article 4(2) of Treaty That on facts and in the circumstances of the case and in law, the CIT(A) erred by ignoring the fact that the Appellant had applied the provisions of Article 4(2) of the Treaty dated February 04, 1988 and has erred in concluding that Treaty dated February 04,1988 need to be applied. 5. That on facts and in the circumstances of the case and in law, the CIT(A) has erred in concluding that the Appellant is not eligible for exemption of his salary income for the period January 01, 2016 to March 31, 2016 in terms of the Article 15(1) of the Treaty. 6. That on facts and in the circumstances of the case and in law, the CIT(A) has erred in concluding that the AO was justified in bringing into tax the global income of the Appellant for the period January 01, to March 31, 2016 in India, with no credit for the taxes paid in Indonesia on the doubly taxed income as per Article 23 of the Treaty." 4. Heard and perused the record. 5. The ld AR reasserted the fact and referred to the relevant documents available in the Paper Bok while the ld DR supported the orders of the Ld Tax Authorities Bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2018, the undersigned has reached on the conclusion that the income earned by you form 1st January 2016 to 31st March 2016 should be treated as your income, income in India, and should be a part of your Indian ITR. 2. Facts of the case clearly indicate that you have been a resident of India till December, 2016. The four following points need a brief mention here: (i) Permanent House: Since you have been a permanent resident of India for most of your life and also own a residential property which used to be your residence till Dec, 2016, merely renting out an accommodation for work purposes, that too far a small period of 3 months in the concerned F.Y. does not make it your permanent house. ii) Social and economic ties: Merely changing your work place, does not change your social and economic ties. You have been an Indonesian resident for 3 months in the concerned F. Y. and this is too short a period to from social and economic bonds. (iii) Habitual Abode: On perusal of your residential history it is clearly proved that India is your habitual Abode. (iv) Nationality: Since you are an Indian passport holder, your nationality automatically becomes Indian. 3. So, ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 to 2017-18. Same should have been commutatively taken into consideration to determine the question of permanent home available to the assessee. 12. On the part of the revenue there is nothing before the bench to show that if 'permanent home available' has been defined in a manner that if an individual holds of a residential property in India it has to be considered to be 'permanent home available' for the purpose of Article 4 of the relevant DTAA. If that be the case then the benefit of the Article 4 for the purpose of 'permanent home available' can be given to assessee only if he does not own a residential house in India or if he has his own residential house in the contracting state. Such seems to be not the intention of law. 13. The Ld. Tax authorities have fallen in error in giving a literal interpretation to words 'permanent home available' referred in Article 4 of relevant DTAA, which certainly is not 'permanent house' as understood by the Ld. Tax authorities. Owning a residential unit and having a permanent home available are two patently different things, for determining the tax residency status. While the former is just existence of the right to property (corpus posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 4 is para materia and has made following relevant observation in para 7, which squarely apply to facts of present case:- "7.4 Further, as per UN Model Commentary, the concept of home has been defined as under : "13. As regards the concept of home, it should be observed that any form of home may be taken into account (house or apartment belonging to or rented by the individual, rented furnished room). But the permanence of the home is essential; this means that the individual has arranged to have the dwelling available to him at all times continuously, and not occasionally for the purpose of a stay which, owing to the reasons for it, is necessarily of short duration (travel for pleasure, business travel, educational travel, attending a course at a school, etc.). " 7.5 Further, as per UN Model, the facts to which the special rules will apply are those existing during the period when the residence of the taxpayer affects tax liability, which may be less than an entire taxable period. 7.6 We observe that specific provisions made in DTAA having importance and would prevail over the general provisions contained in the Income Tax Act unless and until the same are in derog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Singapore authorities for the period under consideration and on the basis of that, the Income tax has already been paid by the Appellant in Singapore. Further, may be, the Appellant has stayed more than 182 days in India, however, he also qualified as resident of both India and Singapore under Article 4(1) of the Treaty. As per clause (a) of Article 4(2) of the Treaty, a person shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests). The ld. Commissioner on the basis of tie-breaker questionnaire held that there is no doubt that even the centre of vital interest of the appellant are with India only and not with Singapore, as the majority of the savings, investments and personal bank accounts are in India, whereas it is a fact that the appellant has worked in Singapore during the period under consideration and stayed therein only. Therefore, his personal and economic relations (Centre of vital interests) at that particular time/period cannot be bru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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